Pharmaceutical giant GlaxoSmithKline announced it would cut "several hundred" US commercial jobs and a similar amount in research as part of a restructuring in its main market, where the sale of medicines slows. The stock loses over the 1%.
Philadelphia was spared the bulk of the GSK cuts
Most of the employees of GlaxoSmithKline in Philadelphia are breathing a sigh of relief after the company announced major job cuts would primarily hit North Carolina.
An employee, who wished to remain anonymous, said workers were notified of the layoffs through a six-minute video from the R&D company executive, Patrick Vallance , followed by a joint meeting, where they asked some questions.
The layoffs in Philadelphia will occur in specific therapy areas to be announced on Monday, the employee said.
In a statement, the company confirmed that North Carolina's Research Triangle Park will bear the brunt of the cuts, but declined to disclose the number, which is widely estimated at around 900. About 450 employees in North Carolina will be offered roles in a other company, parexcel .
A GSK spokeswoman, Melinda StubbeeHe said some Research Triangle Park locations will be relocated to Philadelphia, particularly to the Upper Providence site in Collegeville.
George Chressanthis Fox's Temple University School of Business said the decision to downsize follows the industry trend for growing specialization.
“By specializing and focusing efforts on certain areas,” he explained, “hopefully we can increase the chances of producing the next drug.”
GSK, like most other big pharmaceutical companies, he said, is struggling to maintain a pipeline of new drugs as products lose patent protection. With revenues falling due to increased competition from generics, companies have less money to invest in R&D, and the task is made even more difficult and risky when the goal is to find drugs that work substantially better than to current low-cost alternatives.
“These cuts are part of a long-term strategic move by returning the business back to specialist areas such as vaccines, HIV, respiratory and so on,” Chressanthis said.
GSK reported in its latest quarterly earnings report that the company would need to ramp up investment in vaccines, in part through a buyout of Novartis, and wind down some of its oncology units.
The layoffs are part of a maneuverable three-year, $1.6 billion restructuring plan.
GSK has approximately 1,000 employees at its Philadelphia Navy Yard Corporate Center and more than 3,500 at its two suburban campuses in Philadelphia.
GSK cuts research and sales jobs in the US amid a tougher market
The search to consolidate in the UK and Philadelphia as a North Carolina site bears the brunt.
British pharmaceutical giant GlaxoSmithKline Plc (GSK -0.91%) is in the process of cutting hundreds of US jobs in commercial and research sectors, restructuring operations are carried out in its largest market where drug sales are down.
A total of 900 jobs will be eliminated at GSK's Research Triangle Park site in North Carolina, as drug discovery consolidates in Philadelphia and Stevenage, near London, in agreement with the North Carolina Department of Commerce.
GSK said some staff would be offered the option of moving to other sites.
“This is a significant program and will result in the loss of several hundred US commercial sector employees and a similar number in US-based R&D operations,” a company spokesperson said in a mailed statement. electronics.
Sources familiar with the matter said over the weekend the drugmaker would notify US staff about job cuts as it begins implementing a major cost-savings program following a sharp drop in sales. of its best-selling drug for lung conditions, Advair.
Britain's biggest pharmaceutical company announced in October that the new restructuring scheme would save £1 billion ($1.6 billion) in annual costs over three years, though it hasn't gone into effect so far. details.
Staff in the US, where GSK employs 17,000 people in research and commercial operations, were briefed on the changes on Wednesday.
“The cuts have not been made across the board, but are focused, strategic changes to allow GSK to operate more efficiently,” a spokesman said. “This is a scaling of work to accommodate market forces that have been anticipated, but have accelerated and are affecting the entire industry.”
Diseases of the respiratory system have traditionally been GSK's strongest assets with Advair, an inhalation therapy for a chronic lung disease such as asthma, being the biggest seller. But Advair sales are falling in the US, while new lung drugs Breo and Anoro are proving slow to get off the ground.
Advair has been hit by competition from rivals and a growing trend by US health insurers to use hardball tactics to get makers to cut prices for older products.
French rival Sanofi SA has reported similar pressure from US insurers on the diabetes market.
American insurers, who are under pressure to keep premiums in check, are pushing particularly hard to bring down drug prices in areas like diabetes and respiratory disease where there are multiple options for doctors and patients.
