Dr Reddy’s lays off employees above Rs 1 crore package
Dr Reddy’s lays off employees above Rs 1 crore package
Hyderabad-based pharmaceutical giant Dr Reddy’s Laboratories is reportedly cutting costs by laying off employees with annual packages exceeding ₹1 crore, according to media sources.
As part of this cost-reduction strategy, the company has also offered voluntary retirement options to employees aged 50 to 55 working in its Research and Development (R&D) division. Reports indicate that several high-salaried professionals across multiple departments have already been asked to step down.
This major workforce restructuring appears to be driven by underwhelming performance in some of the company’s new business ventures, including a nutraceutical joint venture with Nestle and recent moves into digital therapeutics. Speculation is also mounting over a potential shutdown of the therapeutics division and possible cutbacks in the nutraceutical segment.
The downsizing move could reportedly affect around 300 to 400 employees, aiming for a 25 per cent reduction in workforce expenses, which may save the company nearly ₹1,300 crore annually.
In its Q3 FY25 results, Dr Reddy’s reported employee benefit expenses of ₹1,367 crore, marking a 7 per cent increase from ₹1,276 crore in Q3 FY24. For the FY23-24 period, the company hired 6,281 new employees, spent ₹39.2 crore on training, and recorded ₹5,030 crore in total employee benefit costs, with the median employee salary rising by 7 per cent.
Industry experts link the layoffs to growing global trends, as companies face economic uncertainty and the rise of artificial intelligence. Shantanu Deshpande, CEO of Bombay Shaving Company, recently commented on this issue, warning that professionals in their 40s are particularly at risk during mass layoffs due to being the highest earners in the corporate structure.
“When layoffs hit, it’s often those in their 40s who are most vulnerable because they command the highest salaries,” Deshpande remarked in a recent social media post.
As of now, Dr Reddy’s Laboratories has not officially responded to these reports.
