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Last Updated: Wednesday, 24 October 2007, 13:53 GMT 14:53 UK
Jobs to go at GSK as profits slip
GlaxoSmithKline headquarters
Glaxo has several UK offices
GlaxoSmithKline has warned it will cut jobs and close some factories as part of cost-cutting plans.

The drug firm said it needed to save 700m annually within three years as it tried to offset falling sales of diabetes treatment Avandia.

GSK employs more than 100,000 people globally, with UK operations including Dartford, Maidenhead and Worthing.

Its plans follow rival AstraZeneca's announcement that it was cutting about 7,600 jobs worldwide.

GSK also announced that profits in the three months to the end of September had fallen by 4% to 1.88bn, on sales down 3% to 5.48bn.

In terms of cuts, there will be cuts across the board
Jean-Paul Garnier, GlaxoSmithKline chief executive

The firm was hit by competition from generic drugs and falling sales of Avandia, which dropped 38% to 225m

In July an American health watchdog said Avandia should not be banned, despite data suggesting the drug may raise the risk of heart attack.

A panel of the Food and Drug Administration (FDA) said the evidence was too thin to justify halting sales and instead called for strong new warnings on Avandia's packaging.

Cost cutting

GSK's manufacturing division and its selling and administration unit will both contribute 40% of the 700m in annual savings. The remaining 20% will come from savings in research and development.

The company declined to give details of how many jobs would go and which plants may close.

"Sadly there will be some job losses and possibly site closures, subject to consultation, and we'll do everything we can to support everybody involved in the process," chief executive Jean-Paul Garnier said.

"In some cases we'll be talking about adding jobs and expanding the business, but in terms of cuts, there will be cuts across the board."



SEE ALSO
Glaxo shares drop on drug worries
22 May 07 |  Business
AstraZeneca unveils new job cuts
26 Jul 07 |  Business
Glaxo pays record $3bn in tax row
11 Sep 06 |  Business

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