Glaxo to Cut 900 Jobs in North Carolina to Reduce ExpensesAlbertina Torsoli, Oliver Staley and Doni Bloomfield
GlaxoSmithKline Plc will cut 900 jobs in North Carolina as part of the U.K. drugmaker’s plan to reduce costs by 1 billion pounds ($1.57 billion).
The company is eliminating positions in U.S. commercial and research operations as part of a global restructuring, London-based Glaxo said yesterday in an e-mailed statement. The bulk of the research and development reductions will come in North Carolina, it said.
Glaxo, the U.K.’s biggest drugmaker, is under pressure to reduce costs as earnings have slumped. The company has about 99,000 employees worldwide, with 17,000 in the U.S., 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 Glaxo senior vice president, said in a letter notifying the North Carolina Department of Commerce of the job cuts.
The drugmaker pledged in October to cut costs by 1 billion pounds over three years, with half the savings coming in 2016. U.S. 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 percent by 2015, from $5.3 billion last year.
Glaxo shares fell 1.6 percent to 1,466 pence as of 10:18 a.m. in London trading. That extended the stock’s decline this year to 9 percent.
Glaxo is trying to establish new respiratory drugs in the U.S. 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 yesterday.
The drugmaker 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.
Glaxo said it will consolidate R&D operations in two centers, in Philadelphia and Stevenage, England. Some jobs will be relocated to Philadelphia.
Glaxo will “be more agile to flex with shifting market demands,” it said.