Dr Reddy's Disputes Claims of 25% Workforce Cost Cuts and Layoffs
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Synopsis
On April 14, Dr Reddy's Laboratories refuted allegations concerning a 25% workforce cost reduction and layoffs of high-salaried staff. The company declared the reports as factually incorrect and emphasized its ongoing hiring efforts to support expansion.
Key Takeaways
- Dr Reddy's Laboratories denies media claims regarding layoffs.
- The company states that the reports are factually incorrect.
- No employee layoffs targeting high earners will occur.
- Dr Reddy's has been actively hiring to support business growth.
- The firm reported a significant increase in employee benefit expenses.
New Delhi, April 14 (NationPress) The pharmaceutical giant Dr Reddy's Laboratories on Monday refuted media claims suggesting that the company intends to implement a 25 percent reduction in workforce expenses and is laying off employees with high salaries.
The firm declared the information to be factually incorrect and firmly rejected the assertions made in the article.
"We would like to clarify that the mentioned news is factually incorrect. We firmly deny the assertion regarding a 25 percent workforce cost reduction and the other claims stated in the news piece," Dr Reddy’s remarked in a stock exchange announcement.
The company further noted that it refrains from commenting on market speculation.
“In this context, please be informed that the Company does not engage with market speculations and there is no current event or information requiring disclosure under Regulation 30 of the SEBI Listing Regulations," the organization added in its statement.
Previously, a news article indicated that Dr Reddy's had commenced a significant cost-cutting initiative, requesting several senior executives, particularly those with annual earnings exceeding Rs 1 crore, to resign.
The article also alleged that the company had extended voluntary retirement offers to employees aged between 50 and 55, primarily from its research and development sector.
It was further suggested that approximately 300 to 400 employees could be impacted by this initiative.
The report indicated that this action was perceived as part of the company's broader strategy to enhance operational efficiency, especially considering its recent expansions into new sectors like nutraceuticals (through a partnership with Nestle) and digital therapeutics.
However, Dr Reddy’s insists that no such cost-cutting actions targeting employee layoffs have been implemented.
The company highlighted that it has been actively hiring in recent years to facilitate its growth into new markets.
In fact, Dr Reddy’s reported consolidated employee benefit costs of Rs 1,367 crore in Q3 FY25, marking a 7 percent increase from Rs 1,276 crore during the same period in FY24.
The firm also recruited over 6,200 individuals in FY24 and invested nearly Rs 39 crore in employee training and development.
