German Merck Group Shuts Two Israeli R&D Centers, Lays Off All Employees

The German pharmaceutical company Merck Group is set to close two of its research and development centers in Israel, resulting in the dismissal of all employees at these sites. The affected centers include the electronics R&D facility acquired through the purchase of Q-Light in 2015, and the life sciences center in Rehovot, originally part of Sigma Aldrich acquired in 2014. Meanwhile, Merck's drug development site in Yavne, known as Interlab, will undergo restructuring with an initial reduction in staff, followed by potential new hires focusing on innovative drug development areas such as artificial intelligence, which are considered Israel's competitive advantages. There are no reported changes expected at Versum Materials in Kiryat Gat.

Merck, founded in Germany in 1668, has been active in Israel since the 1970s, initially as a distributor. Its significant involvement in Israeli drug development began in the 1990s with the multiple sclerosis drug Rebif, developed jointly by the Weizmann Institute and Serono. After acquiring Serono, Merck closed the joint manufacturing plant but established the Interlab R&D center in Yavne in the early 2000s to continue pharmaceutical development in Israel. Merck operates three divisions: biologics, chemicals, and materials. In 2019, its materials division acquired the Jerusalem-based startup Q-Light, specializing in nanotechnology for thin documents, and in 2014 it acquired Sigma Aldrich, which included the Rehovot facility now closing.

In June 2023, then-CEO Belén Garijo stated, "We are definitely here for now and hope the situation continues to allow this," at a time when Merck employed approximately 450 people in Israel. The current closures mark a significant shift in Merck's Israeli operations, focusing future efforts on cutting-edge pharmaceutical technologies.