The Spanish multinational blood products grifols announced this Wednesday that it will launch a cost savings plan, to reduce spending by 400 million per yearwhat includes the dismissal of 2,300 employees, the vast majority in the United States and a hundred in Spain.
In a statement sent to the CNMV, the stock market supervisor, Grifols reports that about 2,000 jobs will be cut throughout 2023 in the United States to “optimize costs and plasma operations”, which should allow annualized savings of up to 300 million.
Another 300 people will be affected by the “rationalization of corporate functions” planand of this total a third of departures will take place in Spain.
Specifically, the plan focuses on three main areas to achieve these savings, with main emphasis on optimizing costs and operations in the plasma area, with the aim of creating a more efficient blood collection platform, accessible to donors. and equipped with the most modern technology.
The plan intends to maintain plasma volumes, since in recent years the ups and downs in collection have threatened the group’s ordinary activity. The ultimate objective is to reduce the cost per liter of plasma through a set of measures that are expected to generate annualized savings of at least 300 million euros in relation to the 2022 financial year. The measures include the closure or consolidation of centers of inefficient donation (18 centers closed in the fourth quarter of 2022 and additional closures expected during the first half of 2023). All these measures must be accompanied by the optimization of managed donors.
The largest adjustment in the US
These measures will reduce the workforce of the plasma business in the United States by approximately 2,000 jobs in 2023.
Cost reduction must also be coupled with various initiatives, including the centralization and automation of workflows, the implementation of shared services in business areas, the consolidation of providers, the simplification of reporting structures, and the elimination of functions and duplicate posts, etc.
These initiatives will affect close to 300 people, most of them in the United States and approximately a third in Spain.
The improvement of efficiency throughout the organization will require, as recognized by company sources, efforts in all areas of the organization. Thus, saving measures will also be considered in the purchasing area, but also in logistics and facilities, since the optimization of some office spaces (non-industrial) is expected.
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Grifols estimates a non-recurring charge of approximately 140 million euros to carry out the planned cost-saving initiatives. Execution of the plan will begin in the first quarter of 2023 and will be completed throughout the fiscal year, subject to applicable law and other requirements.
It is expected that most of the measures will already be implemented in the fourth quarter of 2023. However, due to the accounting treatment of inventories and the implementation schedule, most of the annualized cost savings will be reflected in the account of results for 2024, although an impact of 100 million euros of savings is expected in the income statement for 2023.