Fresenius Medical Care to Cut Up to 5,000 Jobs on Covid Toll

(Bloomberg) -- Fresenius Medical Care AG plans to eliminate as many as 5,000 full-time positions as patient deaths from Covid-19 reduce the German kidney dialysis company’s revenue prospects.

The company will spend 450 million euros ($522 million) to 500 million euros to fund the restructuring of its operations into two segments -- care enablement and care delivery, according to a statement Tuesday. The measures aim to save 500 million euros a year by the end of 2025.

Beyond the lost revenue from patient deaths, the company is also facing increased costs from safety measures and grappling with inflation. Dialysis recipients are at heightened risk of severe Covid. Throughout the pandemic more than 18,000 Fresenius Medical Care patients have died than would be expected from historical trends. 

The company now expects revenue and profit at the lower end of its guidance range this year. While the company had forecast fatality rates to return to pre-pandemic levels by this summer, the delta wave in fact caused 2,700 more patient deaths in the third quarter than projected.  

The “pandemic is an unprecedented situation for all of us and still costs many lives day by day,” Chief Executive Officer Rice Powell said in a statement. 

The stock rose as much as 4.3% in Frankfurt.

The company previously guided for revenue to grow at a low- to mid-single digit percentage rate and net income to decline at a high-teens to mid-twenties percentage rate.

Operating income slid to 505 million euros in the third quarter. The company expects the steps to deliver net savings from 2023.

Separately, parent company Fresenius SE raised its full-year sales forecast and said it now expects 2021 earnings around the top end of its guided range.

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