Novartis, Dr. Reddy’s deal results in 400 layoffs

Feb. 15, 2022

Novartis India has announced an exclusive distribution deal with Dr. Reddy’s Laboratories — but it will result in close to 400 employees losing their jobs.

The deal aims to broaden patient access to Novartis India’s pain-relief drugs Voveran and Methergine, which are used to treat severe bleeding after childbirth. Distribution will be done using Dr. Reddy’s sales and distribution strengths, according to a report from Novartis India.

Hyderabad-based Dr. Reddy’s is known for the wide range of drugs that it produces and markets in India and internationally.

Novartis India said it is trying to manage the interests of patients, who can benefit from the improved access to medicine that the collaboration will provide, and the interests of its employees, who will be affected by the change. To soften the blow of the massive layoffs Novartis India says it will offer a severance package and outplacement services to those who are let go.

“We understand the implication on the roles of our colleagues in Novartis India Limited and are doing our best to support them,” said Sanjay Murdeshwar, country president and managing director of Novartis in India.

According to an article in Moneylife, the annual report of Novartis India claims 539 employees at the listed entity. Sales and profits at Novartis India, owned by Switzerland-based Novartis, have not kept up with the rapid growth of the Indian pharmaceuticals market. According to Moneylife analysis, "some shareholders allege that it is a deliberate strategy of hollowing out the listed entity."