Fears grow for 150 jobs in wake of United Drug cost-cutting plan
Published 27/08/2011 | 05:00
Irish healthcare company United Drug has confirmed that up to 150 staff could be impacted by a previously announced move to rationalise the group's wholesale business here in light of a tough pharmaceutical market and government-imposed price reductions.
United Drug said a "business transformation programme" that it unveiled earlier this month would affect full-time and part-time staff in Ireland. It added that the cost reduction programme was being undertaken in order to remain competitive.
United Drug said two weeks ago that it intended to slash €5m from its group cost base in a move that would save the company €9m. The company employs 650 people in Ireland and the bulk of the cost cutting will take place here.
"Up to 150 full and part-time staff may be impacted by the changes depending on the outcome of our voluntary redundancy programme, the extent of redeployment within the business and the outcomes of discussions with staff," said a company spokeswoman.
United Drug said that it wouldn't make any further comment regarding the cost reduction programme and that it would engage with staff over coming weeks.
It said that its revenues and margins had fallen in its Irish wholesale business due to state-imposed price reductions and regulatory changes.
"The impact of these changes is particularly acute as our industry generates margins of circa 1pc."
However, in its recent interim management statement, United Drug said that much of that impact had been offset.
"Market share gains in our wholesale business along with new business wins in pre-wholesale have helped to offset much of the impact of these regulatory changes and a fall in the value of the Irish wholesale market of over 4pc," it said.
United Drug said it was on target to deliver operating profits for the financial year that ends next month ahead of those generated last year.
In the fiscal year to the end of September 2010, United Drug posted adjusted pre-tax profits of almost €68m.
It generates less than 35pc of its group profits in Ireland and has operations in the United States, the UK, the Netherlands and Belgium.