Bayer promised to grow jobs in Missouri. It didn’t.

But the company never received the benefits, and late last year Bayer withdrew from the program. Two months later, the company announced a widespread restructuring effort.

Now it’s clear Bayer knew this past fall that it would be cutting jobs, not adding them.

The company has been struggling with the cost of lawsuits, many of them associated with Monsanto products like Roundup, the weedkiller that has cost the company billions in settlements. Over the past few months, CEO Bill Anderson has rolled out a series of overhauls intended to address Bayer’s financial woes.

In the first quarter of the year, Bayer cut 1,500 jobs companywide, many of them in managerial roles. The impact in the St. Louis region is unknown, though earlier this year the company asked employees to volunteer for severance packages.

The state approved three tax incentive programs for Bayer. The company landed one as Monsanto, years before the German conglomerate Bayer bought the Creve Coeur-based company. That incentive package yielded nearly $2.9 million in withholdings and $1.3 million in tax credits before ending in 2022.

Bayer was approved for the additional $44 million in incentives in 2019, but withdrew in November without receiving any of the tax breaks.

Bayer said it withdrew because the company didn’t meet the job creation requirements attached to the deal. To receive the incentives, the company would have had to retain at least 3,300 jobs and create at least 100 new ones, according to the state Department of Economic Development.

The company said the decision was due to a combination of remote work, mounting legal expenses, the COVID-19 pandemic and its move to a new operating model. 

Though Bayer’s job cuts began to materialize in early 2024, the company’s broader restructuring will unfold over the course of years.

At a recent investor event, Anderson said his team considered a wide range of options before resorting to the current plan. They looked at IPOs and spins, he said, and selling Bayer’s consumer health business was an obvious possibility — and one that investors have pushed for. Bayer’s consumer health division includes its namesake aspirin, Alka-Seltzer, Claritin and other over-the-counter drugs. 

“All around us, our competitors have moved to pure-play companies. Virtually all our competitors are now pure-play, and it is pretty clear why that happens,” he said, according to a transcript.

Selling the consumer health business would help with Bayer’s debt, but the costs and tax losses would be significant, Anderson said. And an IPO or spin would be an all-hands-on-deck effort for two or three years.

Besides, none of those options would fix what he described as Bayer’s “litigation problem.”

“In some ways, having a new pot of cash, I would say there might be other people who would have designs on that cash,” Anderson said.

He said a company breakup is off the table for now, but not forever. Instead, Bayer would spend the next two to three years working down its debt, “reining in the litigation situation,” improving its drug pipeline and transitioning to its new operating model.

Michael Mazzeo, the dean of Washington University’s Olin Business School, said companies can succeed with such disparate businesses under one roof.

“Sometimes businesses that look very different end up having commonalities that can be leveraged in a positive way. And sometimes businesses that look very similar on the outside turn out to be very different because they have different customers and different needs,” Mazzeo said. “And then, as businesses change … they can drift further and further apart, kind of like relationships.”

Corporations, he said, are constantly evaluating those relationships to see if they continue to serve the company.

Damien Conover, equity analyst with Morningstar, said it makes sense to keep the company together amid the widespread restructuring. But once that work is done, the idea is worth revisiting.

“I think at that point it makes a lot of sense to break up the company,” Conover said. “There’s just no major synergies between crop science and health care. I think you could really get probably a more efficient company, if you have those divisions separated.”