Mumbai: GlaxoSmithKline Plc, Europe's biggest drugmaker, will cut around 350 jobs in drug research and development as part of an ongoing restructuring programme, the company said.
The reductions, representing around two per cent of the group's worldwide R&D workforce of 17,000, add to the growing tally of job losses caused by increased generic competition to research-based pharmaceutical companies.
At the same time, GSK is shifting research and development activities to lower-cost countries, including China, and partnering with smaller biotech companies to come up with new drugs.
As part of the programme, GSK will eliminate half of about 500 jobs at its two research and development centers in Philadelphia and RTP - the two centres involved in finding treatments for cardiovascular and metabolic diseases, including diabetes. GSK now employs 4,700 in RTP.
GSK's restructuring has been fueled by rising competition from generic drugs, and about $2.5 billion in lost sales of Avandia - a best-selling diabetes pill until a study published in May 2007 linked it to an increased risk of heart attack. The drug maker is also facing patent expirations of drugs that are likely to generate $4.6 billion in annual sales this year.
The staff cuts are part of a longer-term strategy to ensure effective competition in a rapidly changing and challenging environment.
The company has informed scientists and administrative staff at research sites in Europe and the United States of the reductions this week.
The sites affected include three in the United States - Research Triangle Park, Upper Providence and Upper Merion - as well as Harlow in Britain and Verona in Italy.
GSK shifted focus of an earlier savings programme that involved manufacturing and selling to R&D after a recent report by investment bank ABN Amro criticised the fall in productivity in its laboratories.
GSK spokeswoman acknowledged the job cuts but declined to provide details, except to say that employees will be notified this week and receive severance packages.
The restructuring programme, which aims to save as much as $1.4 billion annually over three years, was initiated by Jean-Pierre Garnier, GSK's former chief executive.
Garnier retired last month and has been replaced by Andrew Witty, who pledged to boost GSK's investment in new drugs discovered outside the company.
GSK has been asking all employees in targeted areas to appear for interviews for the remaining positions, to decide on whom to lay off.