Reference no: EM132984619

Sanofi SA

Sanofi SA is France's biggest pharmaceutical company and a world leader in vaccine development, has come under criticism for its slow COVID-19 vaccine rollout. Sanofi and British partner GlaxoSmithKline said last month that their potential vaccine will not be ready until late 2021 because they need to improve the shot's effectiveness in older people.

Asides from this news, Unions recently held a one-day strike at the lab where it is developing a COVID-19 vaccine and some other sites, to protest job cuts which the company had planned despite a boost in investment amid the pandemic. According to the Union, this is against the terms of labor contract. Some 200 workers with union flags and megaphones gathered outside the entrance to the sprawling Sanofi research and development facility in Marcy l'Etoile in central France. Unions claimed that the hundreds of planned job cuts in France could slow the fight against the coronavirus pandemic. The company announced last year it plans 1,000 job cuts across France over three years "to reinforce the effectiveness of our organization and adapt to the evolution of jobs and stakes of tomorrow." It said in a recent statement that it would rely on voluntary departures but would not comment further because of confidentiality rules amid ongoing negotiations with unions. Union members at other facilities in Marcy l'Etoile also plan to join broader demonstrations in France against job cuts during the pandemic.

These events were triggered by Sanofi SA's direction of focusing on its global expansion because of the relatively high cost of running its research facility in central France. When Sanofi told its researchers that it was closing their facility, employees began staging weekly impromptu protests on their own, supported by the French government, which opposes profitable companies slashing jobs. After 9 months, the company was still waiting for a government approval on the situation so it could finish negotiating with its unions and try to get some of them other jobs elsewhere. As one Sanofi manager said, "In France, the politics, the labor laws are extremely different than in any other regions.... It means that for sites like Marcy l'Etoile ... anything you want to do differently gets to be a confrontational issue.

Meanwhile, Sanofi faces another issue with sending its headquarter employees abroad for overseas assignments. Due to its aggressive expansion, the high cost associated with sending its employees on long term expatriate assignments have impacted its operating margin. The company's human resource team (HR) plays a big role in controlling and reducing expatriate costs. The management report shows some of the steps HR team is taking to reduce these expenses. First, the company is upping the numbers of short-term assignments. This lets them use short-term expats to replace long-term expats (and their families) who the company must maintain abroad for extended periods. With an eye on cutting costs, HR is also reviewing the firms' policies regarding such things as housing, education, and home leave, along with expatriate allowances and premiums (cost-of-living allowance and mobility/quality-of-living premiums). The bottom line is that there are a lot the HR team can do to cut costs and boost profits by better managing expatriate assignments.

a. Determine three (3) HR related issues from the case that are faced by Sanofi.