Bayer has announced plans for more than 1.5 billion euros of annual cost cuts as of 2024 amid a 'difficult market environment' caused by the pandemic.
In a statement, the agri-chemical giant said the ongoing Covid-19 crisis had impacted the global agricultural market in particular.
It has introduced operational savings of more than 1.5 billion euros (£1.36bn) annually as of 2024, on top of annual earnings contributions of 2.6 billion (£2.35bn) euros as of 2022, unveiled in November 2018.
The German firm also confirmed an adjusted outlook for 2020, and expects 2021 sales at approximately levels seen this year.
Bayer explained that the direct and indirect effects of the Covid pandemic will be 'deeper than expected' on the Crop Science business.
The agricultural sector, in which Bayer plays a leading role, is characterised by 'reduced growth expectations due to low commodity prices for major crops, intense competition in soy, and reduced biofuel consumption'.
The company said this was compounded by negative currency effects, some of which were significant as in the case of the Brazilian Real.
This situation is unlikely to improve considerably in the near-term, the firm added.
Against that background, Bayer said it expected to take non-cash impairment charges in the mid to high-single-digit billion-euros range on assets in the agricultural business.
Werner Baumann, Bayer's Chairman of the Board of Management said: “Despite the difficult market environment, the urgent need for agriculture solutions has never been more evident.
“We believe the additional measures are necessary to accelerate our overall transformation, generate margin improvements and thus maintain our competitive profile.
"They will help mitigate the impact of Covid-19 on our business. We must adapt our cost structures to the changes in market conditions and at the same time generate resources for further investment in innovation and growth."
The company will present a detailed forecast for 2021 along with an updated mid-term outlook when it publishes its results for the full year 2020.
