As the pharmaceutical industry's business market changed to non-face-to-face after the Covid-19 pandemic, multinational pharmaceutical companies have been reorganizing and reducing their workforce on a global scale.

In 2021, Lilly Korea, Roche Korea, and Zuellig Pharma Korea cut jobs mainly in sales positions.

This year is no different as the offshoots of multinational pharmaceutical companies such as GSK, Pfizer, Novartis, and Sanofi Aventis have announced an early retirement program (ERP) one after another in the second half of this year.

GSK was the first to announce its intention to reduce employees through an ERP in August.

GSK accepted ERP applications for its sales representatives from Aug. 17-30. It is the third ERP the Korean offshoot of GSK has conducted over the past five years.

According to GSK Korea, the ERP has been completed.

Pfizer Korea is also conducting an ERP.

However, the company did not disclose a specific ERP scale and said it could not disclose specific details related to the reorganization as it may contain personal information about the company's operations and employees.

However, industry watchers have said that Pfizer sent out an email to 10 percent of its employees informing them that they were eligible for ERP.

Novartis Korea also completed its ERP program and launched a new organizational system on Oct. 1.

The ERP follows Novartis headquarters announcing a global reorganization in June to make a major adjustment to integrate the pharmaceutical and oncology businesses.

The goal is to save $1 billion by 2024 by reducing unnecessary manpower in the process of consolidating departments with a plan to cut 8,000 employees worldwide.

Accordingly, Novartis Korea has also promoted the ERP for its legal, HR, marketing, and sales teams with overlapping tasks.

Notably, the biggest change in Novartis Korea was the disintegration of its respiratory disease division.

“In line with the strategic direction of the headquarters, Novartis Korea has undergone organizational restructuring to focus on its core treatment business,” a Novartis Korea spokesperson said. “Notably, regarding employees from our respiratory disease division, those who did not apply for ERP are being relocated to other departments according to their wishes and business needs.”
With this reorganization, about 50 people voluntarily applied for ERP, and the company has completed related procedures, she added. 

Sanofi-Aventis Korea was the most recent multinational drugmaker to push for its ERP plan.

While the details of the ERP have yet to be disclosed, the labor union of Sanofi said that it is currently negotiating the terms with the company.

However, of the companies conducting ERP, Pfizer Korea, and GSK Korea are being criticized by their labor unions because they are downsizing the workforce even after posting good earnings.

Pfizer Korea recorded an operating profit of 59.2 billion won last year, turning profitable from an operating loss of 7.1 billion won in 2020.

GSK Korea’s operating profit skyrocketed by around four-folds to 10.7 billion won in 2021, compared with the previous year's 2.6 billion won.

The unions of the two companies questioned why the company tried to cut sales persons who contributed to sales growth.

They criticized their global headquarters for taking profits in Korea only and neglecting job creation and corporate ethics.

This has led the National Pharmaceutical & Bio Labor Union (NPU) to visit the National Assembly on Sept. 6 to urge lawmakers to revise related laws to protect workers in the biopharmaceutical industry in a situation where multinational pharmaceutical companies are implementing ERPs indiscriminately.

"Multinational pharmaceutical companies, which have achieved great sales during the last two years of the pandemic, have had no management difficulties by expanding non-face-to-face sales and reorganization," the NPU said. "However, they are still conducting large-scale layoffs of sales workers."