• Home
• /
• Business

British drugs giant GSK to cut jobs

LONDON - British pharmaceuticals group GlaxoSmithKline said Thursday it would cut jobs under stepped up plans to slash annual costs by 1.7 billion pounds (1.9 billion euros, 2.5 billion dollars) by 2011.

Reports at the weekend had suggested that GSK would announce plans to cut up to 10,000 jobs, or 10 percent of its global workforce. French unions on Wednesday said 850 jobs would go in France.

GSK said its 2008 net profit fell 11.7 percent to 4.60 billion pounds.

"We enter 2009 with confidence and expect to make further good progress in implementing our strategic priorities that will enable us to meet our long-term objective of reducing risk and delivering sustainable growth to shareholders," chief executive Andrew Witty said in a statement.

GSK had originally planned to slash annual costs by 700 million pounds, less than half the new target.

"We are very conscious of the effect this programme will inevitably have on our employees and if options exist where we can achieve our financial goals and preserve jobs we will do everything we can to do so," it said.

"Where no other option aside from redundancy exists, we will support those employees affected in every way we can.

"In line with previous practice we will not be providing targets for job reductions and we will announce restructuring outcomes once employees, relevant works councils and trade unions have been consulted and informed," it added.

Pharmaceutical companies are looking to cut costs as they face more competition from makers of generic drugs -- those treatments that are no longer under patent protection.

Anglo-Swedish pharmaceuticals giant AstraZeneca had last week said it would axe 7,000 more jobs by 2013, extending a cost-cutting programme that has already shed about 8,000 positions since 2007.

GSK said on Thursday that its net profit fell 7.1 percent to 982 million pounds during the three months to December.

For the full-year, revenue rose seven percent to 24.35 billion pounds.

Chief executive Witty said 2008 had been a "challenging year ... due to the adverse impact of significant US patent expiries and declines in Avandia sales.

"As we forecasted, these factors led to a decline in earnings per share for the year which was compounded by an unexpected legal charge in the fourth quarter."

Demand for Avandia has slumped since 2007 after US medical journals said the diabetes drug significantly increased the risk of heart attack and cardiovascular problems.

In afternoon London trade, GSK shares were down 0.87 percent at 1,257 pence on the FTSE 100 index of top equities, which was about 1.0 percent lower.