By Nicholas Comfort
Bayer AG said it will eliminate 1.5 billion euros ($1.76 billion) of annual costs and may cut jobs as the coronavirus pandemic hits the agricultural market.
The expense reduction by 2024 comes on top of a 2.6 billion-euro efficiency drive announced in 2018, the German chemical and pharmaceutical company said in a statement Wednesday. The resulting cash flow will mainly be used for investments in innovation and growth opportunities as well as to reduce debt, according to the company.
The moves come as Bayer continues to wrestle with litigation over Roundup weedkiller, which it inherited with the purchase of Monsanto. The German company earlier this month extended the contract of Chief Executive Officer Werner Baumann, who oversaw the purchase.
Bayer said the pandemic will hit its crop-science business harder than expected because of a drop in prices for agricultural commodities as well as “intense competition in soy” and lower consumption biofuel.
As a result, Bayer said expects to take “non-cash impairment charges in the mid to high-single-digit billion-euros range” on assets in the agricultural business.