Novartis job losses are a blow but not the start of a downturn

Analysis: Unemployment in pharma is negligible and there are other employers locally

More than 300 workers are to be let go at Novartis in Ringaskiddy, Cork. Photograph; David Creedon/Anzenberger

More than 300 workers are to be let go at Novartis in Ringaskiddy, Cork. Photograph; David Creedon/Anzenberger

 

The announcement that Novartis was shedding just under 60 per cent of the workforce at its Ringaskiddy operation came as a shock. Perhaps it shouldn’t have.

The Cork plant makes active pharmaceutical ingredient – the raw material for older generation medicines . It has been widely known in the industry for some time that Novartis Ringaskiddy has been operating with spare capacity.

The closure is the latest stage in a review of all Novartis operations that the group instigated back in 2016. That has already seen the closure of plants in Switzerland, England, Japan and the United States, with the loss of several thousand jobs, as the company has targeted annual savings of $1 billion (€898 million).

Chief executive Vasant Narasimhan has noted that Novartis is evolving from high-volume products, such as those that would be produced at Ringaskiddy, to more specialised gene therapies and modern biologic drugs.

“We don’t need the same scale that we’ve historically needed,” he said at a briefing earlier this year.

The decline in importance of the company’s cancer drug, Glivec, for which the active ingredient was manufactured at Ringaskiddy for many years, was just one warning bell for the 550-strong workforce.

While the shutting down of the oldest of Novartis’ three manufacturing units on the site is certainly a blow to the workers affected, the job losses will not take effect immediately but will be phased in over the next three years.

And the good news for the 320 workers being let go is that there are other employment options locally. Unemployment in the pharma sector is negligible and industry sources said there were a number of drug companies in and around Ringaskiddy actively looking for staff. Novartis has also offered to help with jobfinding and reskilling of the workers.

Coming hard on the heels of the news that 500 workers at Molex in Shannon will lose their jobs, the announcement raised initial fears for jobs at multinaitonal companies in general. But the two plants have little in common, apart from the fact that both were involved in manufacturing a product that was towards the end of its life cycle.

IDA Ireland mentioned in its half-year report that job losses among foreign direct investment “clients” were at a record low. That was never likely to last forever but there is no expectation that the job losses of the past 48 hours are the sign of a new downturn.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.