Major Layoffs at Dr Reddy’s: One in Four Jobs to Go, Senior Staff Affected
In a significant restructuring move, Dr Reddy’s Laboratories is reportedly reducing its workforce-related costs by nearly 25%, marking one of the most sweeping overhauls in India’s pharmaceutical sector in recent years. According to a report by Business Standard, the cost-cutting exercise is affecting several senior executives, particularly those earning over ₹1 crore annually, as well as veteran employees in the 50-55 age group, many of whom have been offered voluntary retirement packages.
In a significant restructuring move, Dr Reddy’s Laboratories is reportedly reducing its workforce-related costs by nearly 25%, marking one of the most sweeping overhauls in India’s pharmaceutical sector in recent years. According to a report by Business Standard, the cost-cutting exercise is affecting several senior executives, particularly those earning over ₹1 crore annually, as well as veteran employees in the 50-55 age group, many of whom have been offered voluntary retirement packages.
The major impact is being felt in the company’s Research and Development (R&D) division, with long-serving professionals facing the brunt of the layoffs. This move comes as the Hyderabad-based pharmaceutical giant aims to streamline operations and maintain profitability amid changing industry dynamics.
IT Department Issues Show-Cause Notice
In a parallel development, Dr Reddy’s has also been hit with a show-cause notice from the Income Tax Department. The notice, received on April 4, 2025, from the Assistant Commissioner of Income Tax in Hyderabad, pertains to a proposed tax demand exceeding ₹2,395 crore. It relates to the merger of Dr Reddy’s Holdings Ltd (DRHL) with Dr Reddy’s Laboratories Ltd, a consolidation that was approved by the National Company Law Tribunal (NCLT), Hyderabad in April 2022.
The notice seeks an explanation as to why action should not be taken for what it alleges to be income that escaped assessment following the merger.
Financial Performance Remains Resilient
Despite these challenges, Dr Reddy’s continues to demonstrate financial strength. The company posted a consolidated net profit of ₹1,413 crore for the third quarter ending December 31, 2024—a 2% rise compared to ₹1,379 crore in the same period the previous fiscal year. Revenue for the quarter also saw a substantial jump, increasing to ₹8,359 crore from ₹7,215 crore year-on-year.
While the financials remain healthy, the aggressive cost-cutting measures and legal scrutiny could shape the company’s near-term trajectory as it navigates both operational optimization and regulatory compliance.
Sources By Agencies
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