The layoff trend has carried into 2023, and it isn’t confined to the tech sector. French pharmaceutical producer Sanofi SA (NASDAQ:SNY) has reported that it plans to let go of all staff at two vaccine plants based in India. Reuters reports that the company will offer a voluntary retirement scheme (VRS) to all employees, roughly 800 in total. This comes after Sanofi proved unable to procure a contract with UNICEF. SNY stock has been volatile since news of the pending layoffs broke after the close of markets yesterday. While the stock currently remains in the green, news of the Sanofi layoffs raises questions about the company’s future.
Let’s dig deeper into what investors can expect as the drugmaker scales back operations.
The Sanofi Layoffs: A Closer Look
The two plants in question are Sanofi’s Medchal and Muppireddypally facilities, located near the southern Indian city of Hyderabad. According to a report from FiercePharma, the Sanofi layoffs have been spurred by the evolution of healthcare on both local and global levels. A company spokesperson told the outlet that some operations “are no longer viable” as a result. The two plants planning these job cuts produce hepatitis B, diphtheria and tetanus vaccines as well as insulin packaging.
While the spokesperson states that Sanofi is not currently planning on selling any assets, Reuters‘ anonymous source noted the possibility of a sale in the future. The outlet also notes that Sanofi has been struggling since it did not win the contract to supply UNICEF with Shan-5, a vaccine that protects against diphtheria, tetanus and hepatitis B as well as influenza type B.
InvestorPlace contributor Alex Sirois names SNY as a blue chip stock to buy for its significant growth potential. But shares have been highly volatile for the past year, generating no sustainable growth. The Sanofi layoffs suggest that more difficult days are ahead as the company tries to navigate an already turbulent economy.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.