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Nestle to downsize workforce at French skin health R&D centre

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Nestle plans to cut up to 450 jobs at a Galderma research and development centre in southern France, the Swiss company said on Thursday, as it seeks to make the underperforming skin health business more efficient.

Galderma, which Nestle took over from its joint venture partner L’Oreal in 2014, will cut as many as 450 of 550 jobs at its R&D centre in Sophia Antipolis near Nice.

Vevey-based Nestle is under pressure to improve efficiency and shareholder returns after years of slowing growth and its new Chief Executive Mark Schneider is expected to unveil his strategic priorities at an investor event next week.

Skin treatments have been a major part of a push by the world’s largest food maker into higher-growth and more profitable health products to counter a slowdown in its traditional food businesses, which range from KitKat chocolate bars to Perrier water.

Last month Nestle said it would close a skin cream factory in Switzerland, with the potential loss of 190 jobs, and shift production elsewhere in response to a slowdown.

Prescription medicines are moving away from creams towards injections or products taken orally and this shift is being reflected in changes to R&D, a Nestle spokesman said.

Nestle wants to combine development of prescription medicines within a single research centre, whose location has yet to be decided, where about 100 of the employees would be able to find a new job with some 300 people likely to leave.

Nestle plans to review the French site over the next 12 months to decide whether specific activities can be continued.

The company does not break out results for its skin health business separately, but said in July it had lower second-quarter sales volumes and pricing, hurt by a soft performance in China and pressure from generic versions of its medicines.

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