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Tuesday, October 5, 1999 Published at 14:43 GMT 15:43 UK

Business: The Company File

Glaxo cuts 3,400 jobs

Glaxo Wellcome is cutting 3,400 jobs from its global workforce - including 1,700 in the UK.

The BBC's Jonty Bloom explains why Glaxo are cutting jobs
The pharmaceuticals company will phase out secondary manufacturing activities at Dartford, Kent, with the loss of about 1,500 jobs. A further 200 will be cut at its site in Speke, Liverpool.

The announcement has been met with anger by unions, who say they had not been consulted over job losses.

Both sets of UK cuts would be phased in over the next four years, the group said.

It said it would use early retirements, voluntary redundancies, re-training and re-deployments of staff to minimise the impact of the job losses.

Cuts "outrageous"

Chairman Sir Richard Sykes said: "We very much regret the effects of these proposals on employment levels over the next four years, and are committed to providing support to affected employees."

The BBC's Owen Thomas: "Union leaders are appalled"
Roger Lyons, general secretary of the Manufacturing Science Finance Union (MSF) said the decision was "outrageous".

Mr Lyons told the BBC: "The company's arrogance is unbelievable.

"Seventeen hundred quality jobs are being cut in one of the most important and profitable sections of the manufacturing economy - it is outrageous."

He said the union was considering legal action over the company's failure to consult it. This, he said, breached European regulations.

Profit warning

As well as the affected sites, Glaxo has UK manufacturing sites at Beckenham in Kent, Barnard Castle in County Durham, Montrose in Scotland, Ulverston in Cumbria and Ware in Hertfordshire.

Glaxo will continue to invest in primary manufacturing in Dartford.

The job cuts are part of a major restructuring programme announced by Glaxo.

The plans will see its global workforce cut from 21,400 to 18,000.

The programme follow a year-long review of the business and will produce annual cost savings of £370m by 2003. The moves will cost £520 million to push through, the company said.

Poor sales

Glaxo, the fifth biggest company in the UK, announced last week that it would miss its profit target.

It has been hit by poor sales in the US and Asia, in particular for a migraine drug and a quit-smoking treatment.

Last week it said it was struggling to recover from the expiry of patents on two of its best-selling drugs, gastro-intestinal remedy Zantac and herpes treatment Zovirax, in 1997.

The group said the move had "absolutely nothing" to do with the decision by the National Institute for Clinical Excellence to ban the Glaxo anti-flu drug Relenza on the National Health Service.

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