Union hopes Glaxo will be spared fresh cuts

Feb 5 2010 by Peter McCusker, The Journal

UNION chiefs remain optimistic that the latest round of job cuts announced by drugs giant GlaxoSmith Kline will not affect the 800 staff at its Barnard Castle plant.

Glaxo added to job woes in the pharmaceutical sector yesterday as it upped cost-saving targets amid fears it plans to axe 4,000 roles.

The news comes a week after AstraZeneca revealed it was cutting 8,000 jobs worldwide, on top of 12,600 job losses already made.

Glaxo is aiming to slash annual costs by a further £500m in two years, but said it would “try to preserve jobs“. It said: “As before, we will not be providing targets for job reductions and we will announce restructuring outcomes once employees, relevant works councils and trade unions have been consulted.”

Glaxo has its headquarters in Brentford, Middlesex, and research bases at Stevenage and Ware in Hertfordshire and Harlow in Essex.

Its UK manufacturing operations include sites at Barnard Castle, County Durham, Ulverston in Cumbria, Montrose, Angus, and Irvine in Ayrshire.

Almost 200 staff were made redundant at the Barnard Castle plant in early 2009 and Stephen Thompkins, of the GMB, was last night remaining upbeat about its position. He said: “We are optimistic there will be no further cuts following this announcement.”

Glaxo said job losses in the UK would be in the “hundreds not thousands”. Much of the impact of the new cost savings will be in its research and development division, particularly neuroscience.

The group has been cutting jobs over the past year, having ramped up cost savings by £1n last February. But Glaxo has declined to confirm how many of its 99,000 staff have been affected so far.

It delivered £1bn of annual cost savings in 2009 and has another £2.2bn to go by 2012. Most of the new savings will be made in 2011.

Glaxo said: “A significant proportion of these new cost savings will be generated through reduction of infrastructure. Approximately 70% of these new savings will be directed to the bottom line to enhance profitability.”

The news came as Glaxo announced a 12% rise in underlying pre-tax profits to £8.7bn for 2009, with growing demand for swine flue treatment pushing turnover up 16% to £28.4bn.

Recent reports have suggested Glaxo plan to cut 4,000 jobs globally under this latest cost-saving exercise.

More than £150m has been invested in the Barnard Castle plant in the last two years. The company also employs around 300 people at its plant in Ulverston, Cumbria, where it has cut more than 300 jobs.