Roche announces specifics of Operational Excellence Program in Switzerland

The measures planned in Switzerland will help the Group sustain investment in research and product development and thus strengthen the Group’s long-term innovation capability. Over the next two years the initiative will result in the elimination of roughly 770 positions in Switzerland and will add 240 people to Roche’s Swiss workforce through transfers from sites in other countries. There will thus be a net reduction of about 530 positions, or approx. 5%, in the Group’s total workforce in Switzerland. 350 positions will be cut at Group headquarters in Basel.

Commenting on the Operational Excellence Program, Roche Group CEO Severin Schwan said: ”This is a comprehensive, focused initiative to reinforce Roche’s long-term innovation capability in the face of increased price pressures and a more challenging market environment. We will continue to drive our highly promising product pipelines to help seriously ill patients and contribute to more efficient healthcare systems.” Mr Schwan added: “Operational Excellence is a global initiative affecting our sites in Switzerland as well as in other countries. These measures are necessary to ensure sustained success of the company. We will make every effort to find socially responsible solutions for the employees affected.”

Strengthening growth and innovation capability in a changing market environment
Roche today disclosed the measures it intends to take as part of its Group-wide Operational Excellence Program, announced in September. The initiative is a response to mounting cost pressures in healthcare - particularly in the US and Europe - and to increasing hurdles for the approval and pricing of new medicines. Roche expects the pricing environment to become increasingly difficult, especially in Europe and the US. Operational Excellence will improve Roche’s efficiency and flexibility in this changing market landscape, enabling the Group to focus its investments on innovations that promise the greatest clinical benefit for patients.

Planned impact of Operational Excellence in Switzerland
Over the next two years Roche plans to eliminate about 770 positions in Switzerland as part of the Operational Excellence Program. At the same time the Group intends to add about 240 positions at its Swiss sites through transfers from other countries. There will thus be a net reduction of about 530 positions (5%) in the Group’s workforce in Switzerland, which currently totals approximately 10’800 employees. Some positions will be eliminated through attrition.

In the Pharmaceuticals Division efficiency improvements in development and Group functions and portfolio decisions in research and early development will result in the elimination of about 460 positions in Basel. At the same time Roche intends to add about 110 people to its Basel workforce through transfers from other sites and by creating new positions. Overall, a net reduction of 350 positions is planned in Basel. As the Group’s headquarters, Basel is home to corporate staff functions and is a strategic centre for research, development, manufacturing and marketing; approximately 8’800 people currently work at the site.

In the Diagnostics Division site consolidation will further optimise collaboration and cost structures in development and manufacturing.

In Diabetes Care the majority of research and development activities will be based in Mannheim, Germany the unit’s global headquarters. Research and development of insulin pumps will be transferred from Burgdorf, Switzerland to Mannheim. In addition, the plan is to outsource manufacturing and close the Burgdorf site thereafter. These measures will affect roughly 310 positions at Burgdorf.

Most activities relating to blood gas diagnostics will be transferred from Graz, Austria to Rotkreuz, Switzerland, where the Professional Diagnostics unit has its global headquarters. This is expected to result in about 130 new positions in Rotkreuz.

Roche will immediately begin discussions with employee representatives and will conduct the consultation process in an open and constructive manner. Roche is committed to carrying out this workforce reduction in a socially responsible way and to offering affected employees appropriate assistance and support. Roche is aiming to inform employees of the outcome of consultations by the end of January 2011.


Contact: F. Hoffmann-La Roche AG Medienstelle Roche-Gruppe Corporate Communications CH-4070 Basel Schweiz Tel +41-61-688 8888 Fax +41-61-688 2775