More job cuts could be coming at GlaxoSmithKline, as the British drugmaker reduces costs to offset slowing sales.
The company is expected to announce plans to eliminate about 6,000 jobs worldwide Thursday when it reports financial results for the fourth quarter and the full year. GSK has its U.S. headquarters in Research Triangle Park and employs about 5,500 in this area.
The Sunday Telegraph and other British media reported GSK's plans without citing sources. Mary Anne Rhyne, a GSK spokeswoman in RTP, declined to comment Monday.
The reports are in line with what analysts and industry observers expect to happen. "GSK has to reduce its cost structure, become more efficient," said Linda Bannister, a pharmaceutical analyst with Edward Jones.
Sales, marketing support and even research and development are likely targets for the ax. Cuts in all three areas could have ripple effects in the Triangle, where GSK has a research center and provides marketing support for its sales force.
Like other large drugmakers, GSK is struggling with rising pressure from generic competition.
Across the industry, brand-name drugs generating about $78 billion in annual sales are projected to go off patent in the U.S. over the next five years. Without promising new medicines ready to replace the old blockbuster sellers and a global economic crisis slowing sales, pharmaceutical companies are looking to lower their operating costs.
Large drugmakers are shedding high-paying jobs by the thousands.
GSK has announced two restructuring initiatives, the first in October 2007 and the second in November 2008. Under the initiative started 16 months ago to save $1.4 billion a year over three years, the company has laid off more than 200 researchers and production workers in the Triangle and more than 1,500 in the U.S. and Puerto Rico. GSK cut about 1,000 U.S. sales jobs under the second initiative, which was completed by the end of December.
The sales force reduction will affect GSK's in-house marketing support staff in RTP and Philadelphia, Rhyne said. Cuts in marketing support jobs will be completed by the end of the first quarter.
GSK's restructuring is happening at a time when other Triangle employers also are slashing jobs amid the global economic slump.
In December, the Triangle's jobless rate surged to 7 percent, the highest in more than two decades, and the situation is likely to get worse. For example, IBM is cutting jobs in RTP and Nortel Networks, which employs about 2,000 in RTP, is expected to become smaller as it reorganizes in bankruptcy.
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