In yet another major industry shake-up, GlaxoSmithKline is expected cut up to 4,000 more pharmaceutical jobs as it restructures its workforce and focuses increasingly on emerging markets.
The majority of the jobs will be lost in the United States and Europe, according to a report filed by The Sunday Times.
The Sunday Times did not identify a source for its report. The company is expected to announce the planned job cuts alongside its full-year results on Thursday.
Last week, it emerged that AstraZeneca, the Anglo-Swedish pharmaceutical group, plans to cut 8,000 more pharmaceutical jobs worldwide by 2014.
Plans
GSK employs 99,000 people, of whom 16,000 are located in the UK. The global job cull is likely to be felt in Britain, where the company has six R&D sites.
Andrew Witty, who took over as chief executive from Jean-Pierre Garnier 18 months ago, has spearheaded a plan to switch the focus of the British-based company towards fast-growing emerging markets, including China. The Guardian reported that with several of its blockbuster drugs losing their patent protection in western countries in recent years, and US and European governments bearing down on medicine costs as they tackle deep budget deficits, Witty believes the best prospects for growth lie elsewhere.
The new round of cost cuts will raise the company’s target of cost savings from £1.7 billion, announced a year ago, to more than £2 billion. The company is also expected to increase provisions for restructuring, which total £3.6 billion at present, of which three quarters are cash costs.
The Financial Times, also without identifying a source, put the number at more than 3,000 for job cuts. The publication also mentioned that the company will also add substantial fresh provisions, on top of a wide-ranging restructuring it unveiled two years ago, which is still proceeding. It believes it is less exposed in the next few years to patent expiries than AstraZeneca, having already surmounted several in the past two years without a sharp net reduction in sales. It also added that the fall in gross headcount at GSK in its traditional North American and western European pharmaceutical operations will be offset by fresh recruitment in emerging markets and non-pharmaceutical operations. It will include manufacturing, sales, administration and research staff.
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