UPDATED: Sanofi chops into R&D operations in France in latest retrenchment

Sanofi CEO Olivier Brandicourt

Following up on a plan to slim operations and cut $1.6 billion in costs, the new CEO at Paris-based Sanofi ($SNY) is taking an ax to 500 jobs, according to press reports.

Quoting union sources, Bloomberg notes that the pharma giant is eliminating close to 300 open positions in its French R&D operation, another 100 corporate jobs and 155 positions in the commercial division. Le Figaro was among the first French newspapers to report the move, with more coming from Bloomberg.

Rumors have been circulating for weeks now that Sanofi--hit by weak diabetes drug revenue and a failure to launch Afrezza--was planning a fresh round of cuts.

This isn't the first time that Sanofi has cut jobs in France. Former CEO Chris Viehbacher had tried to cut back several years ago, only to be largely thwarted by a backlash from government officials. Still, the trend in the company has been to shift its R&D focus to the Boston area, where it acquired Genzyme for $20 billion.

Now CEO Olivier Brandicourt will test the government of France again, evidently hoping that eliminating open positions will be less painful--or more politically acceptable--than actually cutting jobs. Sanofi has some 110,000 staffers around the world. According to Bloomberg, talks are still underway with union representatives.

Sanofi is staying mum about the move, for now.

"Sanofi will provide an overall update on the new organization on Feb. 9 during the presentation of 2015 annual results," noted a spokesperson for the company in a response to a query this morning from FierceBiotech.

Viehbacher reportedly liked to single out the R&D group in France for its lack of productivity over the past 20 years.

The quickly changing diabetes landscape has particularly affected Sanofi as the insulin Lantus, long the drugmaker's best-selling treatment, has ceded ground around the globe to newer, longer-acting alternatives. Over the past 6 months, Sanofi has signed deals that would trade up to $6 billion for the rights to some diabetes treatments that could eventually help it compete with Novo Nordisk ($NVO), Eli Lilly ($LLY) and AstraZeneca ($AZN), rivals that have surpassed it in some increasingly competitive markets.

Damian Garde contributed to this report.

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