GlaxoSmithKline (GSK) has disclosed it is eliminating 650 U.S. jobs as part of the restructuring it announced in July.
The job cuts consist of 450 “field” sales positions, and 200 back office / support positions—“about 100” each in Philadelphia and North Carolina’s Research Triangle Park, GSK said in a statement.
“In the US, we are facing several external and internal drivers of change as we look at our Pharma business over the next several years. Although we are growing, our aim is to deliver competitive growth and at the same time invest in our R&D ambition for the future,” GSK stated.
“In some areas, we will be making reductions in positions, and in others we will be changing the way we work,” the pharma giant added.
Despite the job reductions, GSK declared: “We remain committed to the U.S. and continue to see it as a positive environment for future investments as we develop and deliver our next generation of innovative Oncology medicines and build capacity for our global vaccines business.”
GSK said it employs approximately 15,000 people in the U.S., where in addition to the commercial hubs at RTP and Philadelphia it operates nine manufacturing sites; a Consumer Healthcare site in Warren, NJ; and global R&D centers in Upper Providence, PA and Rockville, MD.
The U.S. job cuts come six weeks after GSK announced a “major” restructuring program along with its second-quarter results, saying at the time that the initiative “aims to significantly improve the competitiveness and efficiency of the Group’s cost base with savings delivered primarily through supply chain optimisation and reductions in administrative costs.”
Shifting Savings to R&D
GSK added that savings generated through the restructuring “will be used to help fund targeted increases in R&D spending as well as support new products.”
Under CEO Emma Walmsley, who succeeded Sir Andrew Witty as of March 31, 2017, GSK has overhauled its R&D over the past year. Last year, GSK terminated more than 30 clinical and preclinical programs deemed by the company as “unlikely to generate sufficient returns.”
GSK also named a new CSO and president, R&D, Hal Barron, M.D., who previously served as president of R&D at Calico (California Life Sciences LLC), a Google-backed company launched in 2013.
In July, the company announced a revamped R&D strategy that Dr. Barron said would emphasize “science related to immune system, as well as the use of human genetics and functional genomics to identify promising targets, while exploring other technologies that we think will be very, very helpful for that approach, which includes machine learning and other advanced analytics.”
GSK said in July that it expected to incur charges of £0.8 billion ($1.035 billion) cash and £0.9 billion ($1.164 billion) non-cash over the next three years. The restructuring was expected to deliver annual cost savings of £400 million ($517.369 million) by 2021.