👉 Background: CSL is the Melbourne-founded biotech giant, listed on the ASX with a market value of more than $130 billion (making it Australia’s third-largest company behind BHP and CommBank). CSL's biotech empire includes CSL Behring (its core business), Seqirus, and CSL Vifor. The past 15 years have been terrific for CSL with revenue climbing from $5.3 billion USD in 2014 to over $15.6 billion USD in 2025.  

👉 What happened: Over the past year, CSL has copped a bruising with its share price sliding around 20%. But now, CSL is making some big cuts across the company:

• First, it will demerge Seqirus into a separately listed ASX company in the 2026 financial year
• Then, it will cut 3,000 jobs or about 15% of staff
• And finally, it said that it plans to cut its R&D spending

‍👉 What else: These moves are supposed to save CSL $550 million a year by 2027, but it’ll cost up to $620 million upfront just to make the cuts.

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What's the key learning?

‍💡Sometimes the best way to save money long-term starts with copping big expenses in the short term. Companies often announce big job cuts and closures with promises of cost savings down the track. But those savings don’t come for free:

• There are redundancy payments
• There are lease terminations for shutting down facilities
• There are write-downs of underperforming assets
  

💡In this case, CSL is expecting to spend $550 million before actually realising the annual savings. But, according to Gartner, only about 43% of cost‑reduction programmes hit their annual targets in the first year. And when it comes to sustaining those savings over a longer period, the success rate plummets to just 4.7%.

💡 Investors need to assess whether they believe the promised cost savings are actually achievable. Based on the 17% hit to CSL’s share price, it doesn’t look like they’re picking up what CSL is putting down.