GSK wields the axe!
Adding to the list of Big Pharma companies that are shedding jobs left right and centre, GSK today announced that jobs will be cut in order to save 700m GBP per annum (from BBC), which is coming close to the amount that Pfizer plans to cut back on every year (which of course cost 10,000 people their jobs). This comes in response to a 4% fall in quarterly profits (to only 1.88bn GBP), on the back of Avandia’s woes (although I would have thought that the recent weakness of the USD had a large part to play as well). Of all Big Pharma, I would have liked to have believed that GSK would escape from some of the bloodlust that seems endemic in executive circles, but with pension companies and analysts on their back about a stagnant share price, I guess they thought they had to do something spectacular where real people actually started to get shafted (apparently a fairly massive share buyback and hiking dividends didn’t quite do the trick).
It seems evident that corporate flexibility is the order of the day - open a CEDD here,”downsize” a CEDD there - with the result that jobs end up going to countries (China, Singapore) in which GSK can employ people without having to worry about troublesome little staff perks such as a permanent contract, redundancy payments, pension scheme, equity incentive/savings plan and a US/EU sized wage packet, not to mention a stack of employers taxes and high corporation taxes.
GSKs Centre for Excellence in External Drug Discovery has been pretty busy of late - most notably in my mind the deals they have done with Galapagos DPI (asthma, osteoarthritis, osteoarthritis again) and Exelixis (story), and the aquisitions they have made (Domantis et al.). At least if you don’t like the compounds they develop, you won’t be the company handing out the P45s.*
I would like to summarise by saying that I think we are screwed. Time to break out Plan B I think.
**[A P45 is given to taxpayers in the UK when their employment is terminated, and it summarises the amount of tax they have paid thus far for the year in order that their new employer knows what they should be deducting from their wage].
It may be time for GSK to put more money towards research and development and less towards advertising. Remaking old drugs and remarketing them was bound to only last for so long.
Comment by Freebee Foreign Pharmacy — October 25, 2007 @ 6:03 pm
GSK’s position on CEDDS was abundantly clear in 2000. GSK were into corporate restructuring a long time ago, anybody the there remeber Beckenham? Hope things work out.
Comment by DrBaritone — October 26, 2007 @ 2:21 pm
There is always light at the end of the tunnel, from the train that is coming in.
Comment by milkshake — October 27, 2007 @ 2:46 am
Folks I’ve spoken to at GSK feel that 1500 jobs are under threat, which I’m guessing could be accomodated by natural wastage?
However if there are also jobs are moving to China then that has to be a worry for those in the established sites.
Comment by Chris — October 27, 2007 @ 6:09 am