Sanofi Announces Plan to Cut 1,680 Jobs in Europe Amid Strategic Restructuring

The COVID-19 pandemic has imposed greater financial and performance pressures on more companies, while also compelling them to undertake strategic adjustments, leading to more frequent personnel changes in the future.

1. Sanofi Announces Over 1,680 Job Cuts

Recently, according to Reuters, Sanofi, a French pharmaceutical company with over 100,000 employees nationwide, will cut more than 1,680 jobs in Europe to reduce costs and increase profits.

A Sanofi spokesperson stated that the aforementioned job cuts will be carried out over three years, primarily affecting blue-collar factory workers. Going forward, the company will focus on improving efficiency through digitalization and IT outsourcing.

Additionally, Reuters reported on Thursday that Sanofi is currently considering laying off hundreds of employees and will hold talks with employee representatives on Friday and June 29.

A source close to Sanofi stated that none of Sanofi’s manufacturing facilities will be closed, but activities at certain research centers will cease following last year’s decision to terminate research in the fields of diabetes and cardiovascular diseases.

In mid-June, Sanofi announced that it would invest €610 million in two of its production sites in France to transform them into vaccine R&D and manufacturing hubs, with one site expected to create approximately 200 jobs.

Recently, multiple pharmaceutical companies have announced employee layoff plans:

On June 9, Danish pharmaceutical company Lundbeck announced plans to lay off more than 100 employees as part of a restructuring of its research and development operations. In early May, UK-based Orchard Therapeutics dismissed approximately one-quarter of its workforce to conserve cash flow. On April 7, biotechnology firm Sage Therapeutics planned to lay off 340 employees, representing about 53% of its total headcount. The majority of those affected held roles in sales promotion and administration.

Huang Yong, Marketing Director of Yongjiang Pharmaceutical, stated that, in contrast to the domestic market’s greater emphasis on policy fluctuations and their impact, personnel adjustments abroad typically follow several approaches:

The first type is influenced by economic cycles, adjusting the sales team and even the entire company’s business team in response to the rise and fall of these cycles. The second type relates to a company’s global industrial layout and involves its overall strategic planning, such as downsizing certain business units or divesting specific product lines. The third type is tied to the product lifecycle itself; for instance, when a product’s patent expires, pharmaceutical companies make operational adjustments, such as outsourcing to generic drug teams or even selling off the entire operating rights, which subsequently leads to workforce fluctuations.

In fact, if we extend the timeline to 2018–2019, nearly all major multinational pharmaceutical companies, including Pfizer, Bayer, and GSK, experienced personnel adjustments. Essentially, medical sales representatives, staff in new drug R&D departments with high failure rates, and employees in non-core business units were among those at the highest risk of layoffs.

Despite the impact of the pandemic, multinational pharmaceutical companies actually announce personnel adjustments and plans every year to adjust strategies and optimize product lines.

2. Workforce Reductions Are Not Entirely Bad News

Although, in the short term, role adjustments and resignations are by no means good news for individual medical representatives, in the long run, they offer certain benefits to enterprises in terms of optimizing resource structures and fostering professional mindsets among medical representatives.

“From an individual perspective, this encourages representatives to maintain a professional team mindset, as products have life cycles. When a product reaches maturity, companies may make adjustments based on profitability considerations; some less profitable segments may be directly sold off or shut down. Therefore, it is essential to enhance one’s professional competence and become a ‘USB-drive-style’ employee—capable of quickly adapting to different companies and products. Moreover, capable pharmaceutical sales representatives who receive N+2 severance compensation may even find opportunities for career advancement and job transitions,” said Huang Yong.

Meanwhile, he further explained that for a mature enterprise, the decision to reduce staff is always aimed at improving operational efficiency. However, this does not necessarily mean drastic measures or last-resort actions; it may also serve to maximize benefits. The effectiveness of business operations and the degree of resource alignment vary. For instance, a product line and team considered marginal in Company A could become highly successful when taken over by a domestic company specializing in promotion and investment attraction.

In short, pharmaceutical companies and medical representatives face the same challenges regarding workforce reductions, with the difference lying in the macro versus micro perspectives: for companies, it is a matter of strategic layout; for employees, it is a matter of choice. Companies need to consider how to cut costs, focus on core businesses, and adjust their strategic architecture, while employees must develop detailed career plans.

Regarding the choices and planning for both enterprises and employees, Huang Yong suggests that pharmaceutical sales representatives should focus on several key aspects. First, establish long-term goals by asking, “What do I want to do?” There must be a clear connection between one’s aspirations and future choices; for instance, if you aim to promote a specific product or join a particular company, all efforts and resources should be aligned toward that direction. Second, consider “What can I do?” by clearly understanding which product lines and organizational levels your capabilities match, as well as the requirements employers have for employees at those levels. Third, determine “What should I do?” by developing your skills in line with your goals and optimizing your competencies according to the employer’s standards. Meanwhile, enterprises should define the criteria for the talent they need.

From the perspectives of both enterprises and employees, workforce reduction is, on the other hand, a form of optimization that carries certain positive implications for the industry. First-tier enterprises and large multinational corporations possess highly sophisticated training systems. By laying off staff, these companies enable their trained medical representatives to disperse throughout various segments of the industry, bringing advanced product thinking to second- and third-tier pharmaceutical companies, thereby promoting talent mobility within the sector to some extent.

3. Personnel Adjustments Remain the Main Theme

Since 2018, the capital market winter has made investors more cautious; "lowering drug prices" globally has become the main theme, leading to sluggish profit growth in the entire pharmaceutical industry. In China, as a policy-driven industry, national centralized procurement has completely eliminated the excess margins from drug prices.

For winning bid varieties and winning enterprises, logically, national marketing and promotion brand teams are no longer needed. Huang Yong believes that employees in this product line generally fall into two categories: those who can be transferred to departments or product lines not subject to volume-based procurement (VBP), such as for the company’s existing new products not under VBP or products requiring promotion; if there are no available positions within the enterprise, direct layoffs become the ultimate outcome. Furthermore, many companies are unable to absorb large numbers of laid-off pharmaceutical sales representatives—either because they themselves face volume-based procurement, or due to the impact of the pandemic on outpatient and inpatient departments, making it difficult to aggressively expand into the domestic marketing market.

The COVID-19 pandemic has imposed greater financial and performance pressures on more companies, while also compelling them to undertake strategic adjustments; personnel changes will become more frequent in the future.

In response to layoffs and related issues within the industry, Huang Yong recommends that companies proactively develop human resources plans and operational strategies for their product lines. This approach helps prevent situations where employees are laid off just one month after hiring due to policy impacts such as volume-based procurement. Medium- to long-term planning not only ensures responsible management of operational costs but also demonstrates accountability for employees’ career development and professional longevity.

Furthermore, pharmaceutical sales representatives must anticipate policy trends: if your product has been included in the volume-based procurement (VBP) catalogs of many provinces, its inclusion in the local VBP program is only a matter of time. Therefore, it is advisable to proactively plan your career development or seek new professional opportunities in advance.

Responsible Editor: Lulu Jun

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