200 bosses face axe in Glaxo drugs revolution
THE jobs of up to 200 top executives at Britain’s fifth biggest company are under threat as a new boss launches her second daring shake-up in a week.
In a major overhaul of direction for GlaxoSmithKline, chief executive Emma Walmsley revealed a shift in the firm’s focus back towards developing blockbuster drugs.
Yesterday, Walmsley revealed plans to jettison 30 clinical trials and 130 noncore brands, move the company’s attention to the US, embark on a £1bn costcutting drive and plough 80pc of spending into four areas of research.
She warned of significant job changes for the top management team.
Walmsley, 48, said: ‘Over the next year or so, you should continue to see some quite significant evolution to the top 200 in the organisation. Some of that will be a natural cascade with new leaders coming in at the top of the house.’
The comments came after GSK announced hundreds of job losses in the UK, factory closures and the sale of drinks brand Horlicks last week.
Further job cuts have not been ruled out and could be a boon for shareholders who should see coffers bolstered with cash enabling bumper dividend payouts.
Walmsley said: ‘We need to bring more edge, more of a performance focus, more accountability, more pace into our decision making and definitely more cost and cash consciousness.’
‘We want to be broadly spread in discovery to see what’s going to come through next.
‘We just need to have the right kind of discipline on whether something is truly going to be competitive and bring in a commercial voice much earlier than we have done before.’
Potential blockbuster drugs including shingles vaccine Shingrix and a respiratory medicine are expected to come to market this year, in addition to two new HIV drugs.
GSK said it would now focus the lion’s share of its research spending on respiratory, HIV, oncology and immune-inflammation drugs. Walmsley said the firm would retain its focus on balancing its vaccines, consumer and pharmaceuticals businesses but pharma would be the first priority.
The company is considering whether to sell its rare diseases business unit and said it would not apologise for shifting its gaze towards the US. Walmsley said this was not related to Brexit.
She said: ‘There is much room for growth for us there. It is an innovation-friendly market and it is the biggest market.’
GSK yesterday posted a sales boost of 12pc to £7.3bn for the second quarter. It reported a loss of £178m, down from £318m in the same period last year. Shares fell 2.6pc, or 40.5p, to 1545.5p.
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said the sweeping changes appeared to be ‘just the start’.
He added: ‘The group has narrowed its investment focus, with cost savings funnelled back into research and development and the potential for selective mergers and acquisitions.
‘The focus is firmly on improving free cash flow. Given the recent problems GSK has had in that area it is very welcome.’