GSK chops 650 jobs, vowing to shift more money to a weak R&D effort
GlaxoSmithKline $GSK has once again brought out the axe, chopping 650 jobs as the pharma giant slowly looks to funnel more money to the R&D side of the business.
The jobs are coming out of the US sales and back office groups at GSK, which has repeatedly looked to cut costs over the years with major reorganizations like this. There are 100 “support” jobs being cut in each of their Philadelphia and Research Triangle Park groups, with 450 sales reps in the field getting pink slips.
“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,” the company said in a statement. “In some areas, we will be making reductions in positions and in others we will be changing the way we work. The savings from this restructuring will be fully reinvested in R&D and to support commercialization of new products, which will fuel innovation and our future growth.”
This is all part of GlaxoSmithKline’s big revamp announced a couple of months ago, looking to cut out £400 million in annual costs by 2021. The company has billed this as a reflection of its big shift in R&D, where they announced a focus on the immune system, the use of genetics and a greater focus on advanced technologies.
That all was supposed to be reflected in CEO Emma Walmsley’s investment in a stake at 23andMe for a discovery deal. But that proved a major disappointment for anyone looking for some tangible improvement in their weak late-stage pipeline at pharma. Success for GSK has largely been relegated to its majority-owned HIV group at ViiV as well as a separate organization for vaccines.
GlaxoSmithKline is still more focused on cutting than adding anything to the pipeline likely to spur excitement among their patient investors. We’ll see if that changes as R&D chief Hal Barron heads to his first anniversary at GSK.