Processing Magazine

GlaxoSmithKline cuts about 350 R&D jobs

June 12, 2008
The Associated Press is reporting that GlaxoSmithKline PLC, the world''s second-largest drugmaker, said recently it is cutting 350 jobs, or around two percent of its research staff, as part of an ongoing restructuring plan aimed at boosting productivity.

Like other drugmakers, Glaxo is facing declining earnings amid increasing generic competition, setbacks to products and a thinning pipeline of potential future drugs.

Glaxo, the No. 2 drugmaker after Pfizer Inc., said in October that it planned to cut some jobs and possibly close some sites as part of a $3.1 billion program to cut costs, increase research and development and streamline manufacturing.

The program is also expected to deliver annual pretax cost savings of up to $1.4 billion by 2010.

Glaxo did not specify where the job cuts would be made among its worldwide R&D staff of 17,000 as consultations continue with employees. It has research sites across Europe and the United States, including Research Triangle Park in North Carolina, and Upper Providence and Upper Merion in Pennsylvania, Harlow in Britain and Verona in Italy.

The news of the cuts follows the disclosure earlier this week that Glaxo plans to restructure its research and development operations into smaller units. These units will focus on specific diseases and will be rewarded based on performance.

Glaxo had previously split its research operations into therapeutic areas in a move to boost innovation and bring new drugs into the market.

Other pharmaceutical companies have also started reorganizing their research and development units to reflect new scientific breakthroughs and a more demanding marketplace.

AstraZeneca PLC, the second-largest British drugmaker, spun off part of its gastrointestinal research operation into a new firm called Albireo earlier this year, following its decision to focus its efforts on respiratory, cancer and infectious diseases.