New Delhi, April 14 Drugmaker Dr Reddy's Laboratories is allegedly reducing its workforce costs by nearly 25 per cent, and also laying off employees earning above Rs 1 crore yearly, according to media reports.
The company reportedly has also offered voluntary retirement to employees aged 50-55 within its research and development division.
The reports stated that multiple high-salaried employees across various departments have already been asked to resign.
The move comes amidst the company's ongoing efforts to boost operational efficiencies.
IANS contacted Dr Reddy's on the same and was yet to receive a response.
The significant downsizing initiative is likely due to potential underperformance in the recently undertaken new ventures. This includes expansion into nutraceuticals via a joint venture with Nestle and digital therapeutics, coupled with new product launches.
Further, a potential shutdown of the therapeutics division and a possible downsizing within the nutraceuticals arm is expected. The move is likely to impact about 300-400 employees, the reports said.
Notably, a 25 per cent reduction in workforce costs could yield annual savings of approximately Rs 1,300 crore.
In Q3 FY25, Dr Reddy's reported consolidated employee benefits expenses of Rs 1,367 crore -- a 7 per cent increase from the Rs 1,276 crore reported in Q3 FY24.
In FY23-24, the company hired 6,281 individuals and invested Rs 39.2 crore in training and development, with total employee benefits expenses reaching Rs 5,030 crore. The median employee remuneration increased by 7 per cent in FY24.
Layoffs are increasing globally, possibly due to rising economic uncertainty and the use of artificial intelligence.
According to Bombay Shaving Company CEO Shantanu Deshpande employees in their 40s are facing the highest risk. It is because they usually earn the highest salaries.
It has become a growing concern in the corporate world, he noted, in a recent Instagram post.
“When a mass layoff is about to happen, those in their 40s are the most vulnerable because they’re the highest paid,” Deshpande said.
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