Prayers to all

Keeping all in prayer and so sorry this is happening. The naysayers can start their own thread. We don't need the negativity.

 

The sole reason ANY company hires sales reps is to generate revenue. There is no other reason.

In the case of pharma companies, and specifically GNE in this case, the statistical model which looks at market factors and impactable sales provides forecast for what level of sales can be achieved with various levels of sales staff.

In this specific case it appears that the incremental gain in sales revenue going forward (not historical sales levels) does not justify the investment required to fund the sales force as it was previously.


For an example, say a company has a forecast model that says with 50 reps we can generate $500M in the coming year. Then they look at the law of diminishing return and see that due to market conditions, competition, promotional sensitivity, and degree of impactable sales, 75 reps will generate $720M. Still a reasonable investment, but the revenue per rep has declined from the initial $10M/rep model to $9.6M/rep. Then they model a 90 rep sales force and see that it will generate $800M, and 100 reps generates $820M, $8.9M/rep and $8.2M/rep respectively. Remember, the market is not limitless, there is a theoretical maximum level of market penetration and achievable sales.

Now the company has to decide of all the money it has to invest in everything from capital equipment, to R&D, to manpower, what is the smartest level of investment for this sales force size. Now you might say that 10 reps generating that last additional $20M is still in the black when you consider salaries and benefits, but what you are missing is the opportunity cost. That investment might generate $100M ($10M/rep) somewhere else in the organization, instead of the $2M/rep. It's called optimizing ROI.

The MS franchise does not operate in a vacuum, you are part of a large multi-faceted international organization. Sales teams are investments in future sales and not based upon the prior year's sales.

it's nothing personal, it's just how business works. Businesses that don't exercise this type of fiduciary responsibility with investors money will find themselves lacking capital for investments to remain competitive, to develop and market new products, leading ultimately to failure of the company to thrive and the loss of many more if not all employee jobs.

 

Great analysis. As a Roche shareholder and fiscal conservative republican, I want to cut excess weight. Lean as possible. Great management here.

 

Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also. Matthew 6:19-21

 

Consider how the wild flowers grow. They do not labor or spin. Yet I tell you, not even Solomon in all his splendor was dressed like one of these. If that is how God clothes the grass of the field, which is here today, and tomorrow is thrown into the fire, how much more will he clothe you—you of little faith! And do not set your heart on what you will eat or drink; do not worry about it. For the pagan world runs after all such things, and your Father knows that you need them. But seek his kingdom, and these things will be given to you as well.
Luke 12:27-31

 

Obey the laws of the government or have your kids separated.

JS or the Bible

 

Good luck to everyone. For those that get displaced, hopefully GNE will find alternative jobs quickly and take care of everyone.

 

The ... sky ... is ... not ... falling! Even for you MS CSs.