British drug maker GlaxoSmithKline – the second largest pharmaceutical company in the world by revenue – is to cut hundreds of research and development jobs in the UK.
The UK jobs will be lost as part of a global cost savings initiative which will see the company “making sure that we are spending money where we have the best chance of returns,” according to chief executive Andrew Witty. One area deemed unsustainable is research the company has running in the UK into painkillers.
GSK says it wants to find cost savings of £500m over the next two years.
Specific numbers have not been cited on how many UK jobs are at risk but The Times says around 4,000 of GSK’s 99,000 employees globally could be axed. The company has already trimmed the payroll by around 2,000 in the last two years.
The restructuring plans were announced alongside GSK’s fourth quarter results. Its profits in the last three months of the year were up 66 per cent on the same period a year earlier to £2.25 billion. This led year end profits to £7.89 billion, before tax, which were 16 per cent up for the year. Its sales were up by the same percentage to £28.3 billion. One of the biggest contributors to GSK’s results was sales of its Relenza drug – up to £720m last year, compared with £57m the year before – owing to government contracts in response to the Swine flu epidemic.
Despite the job cuts Witty had some words of encouragement for British industry as he disregarded fears that the new 50 per cent tax on salaries over £150,000 could see company executives leave UK shores.
“We are a British company and we have got a huge footprint here in Britain,” he said. “I understand why governments have got to do what they have to do sometimes.”
The news follows last month’s announcement from GSK’s British-Swedish rival AstraZeneca which said it is to shed 8,000 jobs across the world.