CSL to Cut 4,800 Jobs, Spin Off Vaccine Unit

The major restructure is expected to deliver $550 million in savings over 3 years.

CSL signage at the main entrance of it's offices and manufacturing plant in Parkville in Melbourne, Australia on Nov. 6, 2020. Asanka Ratnayake/Getty Images

Australian biotech giant CSL has announced a sweeping restructure that will see around 4,800 jobs cut, equal to 15 percent of its workforce, as part of efforts to streamline operations.

The company will also shut 22 underperforming plasma centres in the 2026 financial year.

CEO Paul McKenzie said the overhaul would deliver annual cost savings of $550 million over three years, though it would involve one-off restructuring costs of between $700 million and $770 million. Of this, $400 million to $450 million would be in cash.

McKenzie said CSL needed to simplify its business model and reduce costs amid shifting global conditions.

“The operating environment had changed,” he said, citing a “dynamic geopolitical backdrop” and growing competitive pressures during the investor call.

Staff at CSL are seen working in the lab in Melbourne, Australia on Nov. 8, 2020. Darrian Traynor/Getty Images

Vaccine Business to Be Demerged

Alongside the cuts, CSL confirmed it will spin off its influenza vaccine arm, Seqirus, into a new ASX-listed company by the end of the 2026 financial year.

The demerger will be subject to third-party consents, regulatory approvals, and a voluntary shareholder vote. Gordon Naylor will chair the new entity.

CSL operates three major divisions: Behring, its core blood plasma business; Seqirus, a global leader in influenza vaccines; and Vifor, which produces treatments for iron deficiency.

“Encouraged by the recent positive Universal Recommendation by ACE, a clear sign that influenza is not going away and it still has severe impact on public health,” McKenzie said during the call.

“It is from this position of strength that we are taking the opportunity to make significant changes that will continue to drive shareholder returns over the long run,” he added.

$750 Million Buyback and Dividend Boost

CSL also announced a fresh capital return plan, resuming its on-market share buyback program. The initiative will begin with $750 million in the 2026 financial year and is expected to expand over the medium term.

“This will be a multi-year, on-market share buyback, starting with $750 million in Financial Year 2026, and is expected to progressively increase over the medium-term,” the company said. “The program will enhance capital efficiency and improve shareholder returns.”

In addition, the company declared a final dividend of US$1.62 per share. Company’s overall the results showed full-year profit up 14 percent to US$3.3 billion ($5.1 billion), in line with the company’s highest expectations.