Drugs giant Astra- Zeneca axes 8,000 jobs

Jan 29 2010 by Iain Laing, The Journal

ANOTHER 8,000 jobs are to be slashed across Astra- Zeneca’s global operations under a sweeping job cuts programme that has already seen 12,600 roles axed at the pharmaceuticals giant.

The jobs will go over the next four years across global functions, including sales and marketing, business infrastructure, research and development and the supply chain.

Astra warned there may be some closures of research and development sites or facilities as part of a company reorganisation which aims to deliver cost savings of around £1.1bn by 2014.

The group has a number of operations across the UK, including its head office in Macclesfield, Cheshire, and sites in Alderley Park, Loughborough, Bristol, Luton and London.

Around 3,500 jobs will go in R&D, although Astra said the net effect after reallocation of roles elsewhere would be closer to 1,800. Astra first announced job reduction plans in 2007 and extended this programme last January from around 9,000 to 15,000 roles by 2013. It extended the timeframe by a year to 2014 and said “keeping our employees informed remains our priority and we will consult fully with them on any proposed changes”.

But the group said it was too early to confirm where the latest job cuts would be made. The last available figures from 2009 showed that around 11,000 staff worked in the UK, although this is likely to be lower after recent job reductions. Astra employs 63,000 people worldwide.

The news came as Astra reported annual figures showing a 24% rise in profits to £6.65bn. The swine flu pandemic provided a boost to sales, with Astra benefiting from government orders for vaccines and treatment.

But the group expects a tough year ahead as it faces competition to its drugs as patents run out. Astra is forecasting revenues will fall over 2010, guiding for a mid to single digit decline. David Brennan, chief executive of Astra, said: “Let’s be clear – 2010 is going to be a challenging year.”

He said the overhaul and job losses were not just about cost reduction and pledged investment in growth areas.

While there have been swathes of roles axed from the business, it has also added around 8,000 new positions. Astra said job losses and cost-cutting had saved it £985m on an annual basis since 2007.

UK rival GlaxoSmithKline has also been shedding jobs and costs amid stiff competition from cheaper generic rival products, including 100 at its Barnard Castle base and 300 at Ulverston in Cumbria.

Glaxo is shaving £1.7bn off its annual cost base by the end of 2011, although it has not confirmed how many of its 100,000 global workforce is being let go.

The firms received a welcome fillip in 2009 from business relating to the swine flu vaccine, with Glaxo also expected to reveal a healthy rise in profits when it reports results next Thursday.