The Basel-based chemical and biotechnology company, Lonza, has announced 400 job cuts at its largest production site, Visp, in canton Valais, citing unsatisfactory profitability, the strong franc and “challenging site complexity”.
With 2,700 employees in Visp, which is home to slightly more than 7,000 people, Lonza is the region’s biggest employer.
The reduction in staff numbers over two years will mainly be achieved through internal transfers, natural attrition, early retirements and the non-renewal of temporary contracts, Lonza said.
A redundancy deal is being made available to employees who are let go. Syna, a trade union representing Lonza staff, denounced the job cuts and called for consultation time to look for alternative solutions.
The cantonal government also said it could not accept the job cuts and demanded an urgent meeting with Lonza’s management to clarify the company’s intentions and the future of the Visp site.
Speaking on Swiss public radio, the government’s president Jean-Michel Cina said he was surprised by the speed of the job cuts. He added that he did not understand why Visp was targeted when other Lonza facilities are less profitable.
“You get the feeling Visp has to contribute towards lowering the group’s debt burden,” he said.
Cost cutting
The headcount cuts are part of a cost reduction programme initiated by the company last year, which aims to cut costs by SFr100 million at the Visp site by the end of 2015.
“We want to assure that Visp remains a long-term competitive and profitable site with attractive work places. We will focus all activities on value creation, by reducing the complexity of the site, improving the cost structure and flexibility,” a company statement said.
The Visp production facility has been faced with profitability problems for several years. It has been exposed to competitive pressure from low-cost manufacturers, unfavourable exchange rates and higher energy costs.
Last year employees in Visp agreed to work an extra two hours per week for the same pay.
A further 100 jobs are being cut worldwide by Lonza in administration over the next two years, a third of which are expected to be in the company’s Basel headquarters.
At the same time as announcing the job cuts, Lonza revealed its business performance was in line with expectations in the third quarter and said management expected company to deliver its full year targets for 2012.