Home / Companies / News /  GSK to cut 900 jobs in North Carolina to reduce expenses

GlaxoSmithKline Plc (GSK) will cut 900 jobs in North Carolina as part of the UK drug maker’s plan to reduce costs by £1 billion.

The company is eliminating positions in US commercial and research operations as part of a global restructuring, London-based GSK said on Wednesday in an emailed statement. The bulk of the research and development reductions will come in North Carolina, it said.

GSK, the UK’s biggest drug maker, is under pressure to reduce costs as earnings have slumped. The company has about 99,000 employees worldwide, with 17,000 in the US, most at North Carolina’s Research Triangle Park and in Philadelphia.

“The restructuring is intended to improve operational performance and contribute to a multiyear cost savings initiative across our commercial operations," Stephen Burr, a GSK senior vice-president, said in a letter notifying the North Carolina department of commerce of the job cuts.

The drug maker pledged in October to cut costs by £1 billion over three years, with half the savings coming in 2016. US sales are flagging amid increased competition for the company’s best-selling Advair asthma medication. Analysts estimate that sales of the drug will decline 30% by 2015, from $5.3 billion last year.

GSK shares fell 1.6% to 1,466 pence as of 10.18am in London trading. That extended the stock’s decline this year to 9%.

Respiratory drugs

GSK is trying to establish new respiratory drugs in the US to help replace the lost sales of Advair. “Retail sales teams focused on launching new medicines to the market will largely not be affected," the company said on Wednesday.

The drug maker will cut 350 Research Triangle Park jobs in the first quarter of 2015, then an additional 450 positions in the second quarter and 100 more by the end of the year, according to the letter sent to the state, known as a WARN notice and required by law. Chemists, engineers, biologists, statisticians and clinical development scientists are the main types of jobs to be eliminated, according to the letter.

The numbers “are likely an overstatement" since some employees will be given the opportunity to relocate to other positions, Burr said.

GSK said it will consolidate R&D operations in two centres, in Philadelphia and Stevenage, England. Some jobs will be relocated to Philadelphia.

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