Drugmaker GlaxoSmithKline is slashing costs and jobs in a new round of restructuring that shows the pressures building on big drugmakers as cheap generics eat into sales.
The company employs about 1,430 people in three locations in Ireland - Cork, Dublin and Dungarvan, Co Waterford.
A spokesperson said GSK had given no details of where the job cuts would be made in its worldwide operations. The company did not spell out the number of jobs it would cut but analysts expect thousands of positions to be shed from a global workforce of around 100,000.
In a surprise move, Glaxo also said it had decided not to give specific guidance on earnings for 2009. The company said the decision was not connected to performance and was designed to focus investor attention on its long-term goals.
The world's second biggest drug company said today that it now aims to achieve annual savings of £1.7 billion sterling by 2011, up from £0.7 billion estimated previously.
Fourth-quarter sales rose 16% to £6.9 billion, flattered by a weak British pound. But earnings per share before major restructuring costs were hit by big legal charges, rising only 9% to 26.7 pence.
The cost reduction programme is the latest in a series of cutbacks across the sector. AstraZeneca Plc last week announced a further 6,000 job cuts and Pfizer, which has agreed to buy Wyeth, plans to cut 15% of the combined workforce, or about 19,000 jobs.
The cuts reflect a new determination by managements to defend profit margins in the face of a wave of patent expiries. With few new medicines emerging from research laboratories and many of the world's top manufacturers facing an evaporation of sales, the industry cannot sustain its current size, analysts say.
Glaxo itself faces cheap generic competition to a range of products, such as Lamictal for epilepsy and Wellbutrin for depression.
CEO Andrew Witty said Glaxo scientists were making progress on a number of projects, including pazopanib which the company has been testing as a treatment for cancer and has now been filed with US regulators.
