Dr Reddy’s slashing jobs to cut costs by 25%, asks several Rs 1 crore+ earners to resign; co denies report

In what feels like a dose of tough medicine, Hyderabad-based pharmaceutical major Dr Reddy's Laboratories (DRL) has kicked off a major workforce cost-cutting drive. According to a Business Standard report citing sources, the goal is to reduce manpower-related expenses by around 25%.

The company, however, had denied the claims in the report later in a stock exchange filing. "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.

Several individuals familiar with the development confirmed to the outlet that high-salaried employees across departments have been asked to resign.


"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," said one source.

The cost-trimming has also reached the pharma giant's R&D division, where employees aged 50–55 have been offered voluntary retirement.

DRL did not respond to Business Standard’s request for comment.

Big numbers, big changes

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.

Industry watchers have also noted that DRL has been taking steps in recent years to boost operational efficiency. For example, it entered the nutraceutical space through a joint venture with Nestlé in August 2024, and launched digital therapeutics for managing migraines and irritable bowel syndrome—software-based tools aimed at improving treatment.

However, not all innovations may be delivering as expected.

Sources indicated to Business Standard that the digital therapeutics division may be shut down entirely, while the nutraceutical unit could see some downsizing. As such, an estimated 300–400 employees across the company may be impacted.

"If these divisions are not doing as well as projected, there may be some downsizng of manpower, it seems," said analysts.

Analysts at Nirmal Bang noted in a previous assessment that DRL is focusing on four key levers for growth:

• Strengthening its base business
• Launching specialty products (including GLP-1 agonists and biosimilars)
• Exploring M&A and partnership opportunities
• Optimising costs

According to BS, the company aims to maintain double-digit growth while achieving 25% EBITDA margins through these strategies.