An Employee Announcement was made at the Swiss offices of Smith & Nephew's on February 5, with information about an upcoming mass layoff, as can be seen from a letter shown to the Zuger Zeitung. According to this letter, the parent company, Smith & Nephew plc, based in London and with 16,000 employees worldwide, has decided to consolidate its distribution organisation. The three existing distribution centres of the medical technology group, in Neunkirchen Germany, Veghel in the Netherlands and in Baar, are to be closed, and the logistics is to be outsourced to Arvato Bertelsmann.
"We hope that the consolidation and outsourcing of the distribution centres will make the global supply chain easier and more efficient," explains the group. The manufacturer of hip and knee implants and other products for the wound treatment of serious injuries also writes: "This will allow us to concentrate on our core skills." And: “At the same time, we can benefit from the distribution experience of Arvato Bertelsmann.” Arvato Bertelsmann is a global service company with 68,463 employees, and is based in Gütersloh, Germany.
As a consequence of the closure, 34 employees will be made redundant in Baar: 32 from the distribution centre and two from the office. Depending on the individual employee, their employment contracts will be terminated in March 2020, with application from September 30 or October 31. A consultation process is still ongoing until 21 February, during which employees can submit suggestions on “how to avoid dismissals, limiting the number of redundancies and mitigating their consequences,” the letter said. In addition, it is planned to issue a social plan for “the employees affected by the mass layoff”.
Smith & Nephew's Swiss distribution centre in the Neuhof industrial area in Baar.
The Office of Economy and Labour of the Canton of Zug was also informed about the upcoming mass layoff. On request, the agency stated that it is not taking an active role in the consultation process, but will instead, through the RAV (Regional Job Service = Regional Arbeitsvermittlung), will help to find a solution for the employees concerned.
The distribution centre is not the only Smith & Nephew division in the Canton of Zug. Only last year, it was announced that the Group's European headquarters, which had previously also been in Baar, would move to the Siemens site in Zug in early 2020 (we reported). As a company spokesman said at the time, around 90 employees would start moving in early 2020. When asked about the remaining logistics centre, he said in October 2019 that it would remain in Baar.
According to the letter from the company, 108 employees are currently working at the new headquarters in Zug, 319 employees at the Aarau location, where hip and knee implants are being manufactured for worldwide sales, and 81 employees in Baar. The question of what will happen to the other 47 employees in Baar is therefore interesting.
On request, a group spokesman for Smith & Nephew would only confirm that consultations are taking place on "future plans for global sales requirements in Europe", and that 34 employees in Baar "may" be affected. It is expected that all other employees will stay in Baar or move to the Zug site.