Restructuring puts GSK jobs in firing line

GLAXOSMITHKLINE (GSK) was planning a reorganisation that would include hundreds of job cuts in the US, people familiar with the situation said yesterday.

The drugmaker was poised to announce a workforce restructuring as soon as this week, said the people, who asked not to be identified discussing a private company matter. They said that the changes would involve operations in the US, where Londonbased GSK had struggled to sell respiratory medicines in recent months, noting that Deirdre Connelly, the president of North American operations, was scheduled to speak to US employees on Wednesday.

GSK pledged in October to cut costs by £1 billion (R17.3bn) over three years, with half the savings coming in 2016.

US 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 next year, from $5.3bn last year.

This has put Connelly under pressure. The former Eli Lilly executive was part of a management reshuffle last month, and now reports to Abbas Hussain, GSK’s head of global pharmaceuticals, rather than directly to chief executive Andrew Witty.

GSK shares have fallen about 8 percent this year, while the Bloomberg Europe pharmaceutical index has climbed about 22 percent.

In October, “GSK announced a new restructuring programme to refocus our global pharmaceuticals business and deliver cost savings”, GSK said in a statement on Friday.

“The aim of this programme is to improve performance by taking unnecessary complexity out of our operations and establish a smaller, more focused organisation, operating at lower costs, that supports our future portfolio.” – Bloomberg