“We wish to clarify that the said news is factually incorrect. We categorically deny the claim of a 25% workforce cost reduction and the other claims mentioned in the said news article,” said the company in a stock exchange filing.
Business Standard quoting its sources had reported that Dr Reddy’s Laboratories (DRL) kicked off a major workforce cost-cutting drive. As per the report, the company has asked high-salaried employees across departments to resign.
What did the report say?
“The internal directive is to reduce manpower-related expenses by around 25 per cent. Several high-salaried employees across various departments have been asked to resign. They include many earning over 1 crore annually,” one source told Business Standard.
The cost-trimming has also reached the pharma giant’s R&D division, where employees aged 50–55 have been offered voluntary retirement.
According to its FY24 annual report, DRL employed 26,343 people globally, of which 21,757 were permanent employees as of March 31, 2024. The company also hired 6,281 new employees in the same financial year. Meanwhile, median remuneration stood at Rs 6 lakh.
In terms of spending, the Hyderabad-based company shelled out Rs 5,030 crore on employee benefits and Rs 39.2 crore on training and development. In fact, 92% of the workforce underwent skill upgrades during the year.
Based on these figures, trimming 25% of manpower-related expenses could save DRL around Rs 1,300 crore annually, reported Business Standard.
For quarter ending December 2024, the pharma major posted a marginal 2% year-on-year (YoY) growth in consolidated net profit, reaching Rs 1,413 crore, compared to Rs 1,379 crore in the same period last year. Revenue from operations for the December quarter stood at Rs 8,359 crore, up 16% from Rs 7,215 crore in the corresponding quarter of the previous financial year. Sequentially, the bottom line rose 13% from Rs 1,255 crore in Q2 FY25, while revenue increased 4% from Rs 8,016 crore reported in the July-September quarter.
