LONDON – GlaxoSmithKline Plc is axing around 350 jobs in research and development as part of an ongoing restructuring programme, Europe's biggest drugmaker said on Wednesday.
The cuts add to the growing tally of positions lost in a global pharmaceuticals industry that is struggling with slowing sales of medicines, increased generic competition and poor returns on research spending.
The headcount reductions represent some 2 percent of the group's worldwide R&D workforce of 17,000, a Glaxo spokesman said in response to inquiries.
“We continue to reshape our R&D operations to take advantage of new scientific opportunities and improve GSK's productivity. Regrettably some job reductions are necessary and we will do everything we can to support those employees who are affected,” he said.
The staff cuts are part of a longer-term strategy to ensure the British-based company can compete effectively in a rapidly changing and challenging environment, he added.
Scientists and administrative staff at research sites in Europe and the United States are being informed of the reductions this week.
The sites affected include three in the United States – Research Triangle Park, Upper Providence and Upper Merion – as well as Harlow in Britain and Verona in Italy.
Glaxo announced last October that it intended to cut jobs in a bid to save costs and would take a 1.5 billion pounds ($2.93 billion) charge as part of a plan that would result in annual pretax savings of 700 million pounds by 2010.
The main focus of that original savings programme was manufacturing and selling, but research and development is also under the microscope as the company seeks ways to improve the productivity in its laboratories.
A recent report from Glaxo's house broker ABN AMRO was critical of its recent research productivity and new Chief Executive Andrew Witty – who took over last month – has promised to push continuing innovation in the R&D process.
One idea involves splitting drug discovery into smaller, more focused units, Patrick Vallance, the company's head of drug discovery, told a conference this week.
(Editing by Rory Channing)
