Dr Reddy's Denies Report On Plans To Implement 25% Workforce Cost Reduction
The pharmaceutical manufacturer deemed the news of its plans to reduce workforce costs by 25% via major layoff initiatives, to be "factually incorrect".
Dr Reddy's Laboratories Ltd. denied plans to implement a 25% workforce cost reduction through an exchange filing on posted on NSE.
The pharmaceutical manufacturer deemed the news of its plans to reduce workforce costs by 25% via major layoff initiatives, to be "factually incorrect".
Saying that they "categorically deny" the claim which was first published in Business Standard's news article 'DRL Trims Workforce Costs By 25% Amid Revlimid-Linked Margin Strain'.
"In this regard, please note that the company does not comment on market speculations and there is currently no such event or information which requires a disclosure," the firm said in its exchange filing.
According to the report Dr Reddy's Laboratories efforts to implement this 25% wage bill cut was going to include the departure of many senior-level executives within its organisation, including those whose net yearly pay was more than Rs 1 crore.
The report cited an anonymous source who was aware of the development. It stated that employees aged 50-55 years who worked in the firm's research and development division were given the option to reitre voluntarily. Many high ranking officials from multiple departments within the organisation were already asked to resign according to the report.
The move was to be a part of Dr. Reddy's continuing plans to increase operational efficiencies.
The company had hired a notable workforce in the years before its recent expansion into nutraceuticals through its joint venture with Nestle and digital therapeutics, along with its new product launches.
The 25% worforce cost reduction initiative would have potentially been introduced to due to their underperformance in these new ventures.
The report implied that a likely closing of the therapeutics division and a potential downsizing in the nutraceuticals sector, might have potentially affected 300-400 employees.
A 25% reduction in workforce costs might have given the firm annual savings of upto Rs 1,300 crore, assuming similar expense levels, the report suggested.
