Pharma giant Dr Reddy’s Laboratories is reportedly cutting workforce-related costs by nearly 25%, signaling one of the most aggressive corporate restructurings in the Indian pharmaceutical sector in recent years.
According to a report by Business Standard, several senior executives have been asked to resign, including many employees in the ₹1 crore-plus salary bracket.
The cost-cutting drive has not spared long-timers as employees in the 50-55 age group, particularly in the Research & Development (R&D) division, have reportedly been offered voluntary retirement.
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While the company hasn’t issued an official statement and HT could not independently verify the report, sources told Business Standard that the cost-cutting is likely to affect high-salaried professionals in leadership and mid-senior roles.
Dr Reddy’s recently received show cause notice from the IT dept
Last week, Dr Reddy’s Laboratories Ltd said it had received a show-cause notice from the income tax authority with a proposed demand of over ₹2,395 crore from it related to the merger of Dr Reddy’s Holding Ltd (DRHL) with itself.
The company received a show cause notice on April 4, 2025, from the office of the Assistant Commissioner of Income Tax, Hyderabad, Dr Reddy’s Laboratories Ltd said in a regulatory filing.
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It requires the company to respond as to why notice should not be issued for the assessment of income alleged to be escaped from tax consequent to the merger of DRHL into Dr Reddy’s Laboratories Ltd (DRL) under the scheme of amalgamation approved by the National Company Law Tribunal (NCLT), Hyderabad on April 5, 2022, the filing added.
Financial performance still strong
In January, Dr Reddy’s Laboratories said its consolidated net profit increased 2 percent to ₹1,413 crore in the third quarter that ended December 31, 2024, driven by robust performance across markets.
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The Hyderabad-based drug major had reported a profit of ₹1,379 crore for the October- December period of the last fiscal.
Revenue increased to ₹8,359 crore from ₹7,215 crore a year ago, Dr Reddy’s Laboratories said in the statement.
