GlaxoSmithKline to slash US workforce in cost-saving program
British pharmaceutical giant GlaxoSmithKline (GSK) will announce later this week that it plans to reduce its workforce in the United States with hundreds of job cuts as part of its cost-saving program.
The Brentford, England-based company said last month that its restructuring plan should bring in annual savings of about £1 billion ($1.56 billion) over three years. It has not yet specified how many workers will be laid off or where.
Reuters quotes unnamed sources who say Deirdre Connelly, head of GSK North America, will tell staff in the US about its plans on Wednesday.
GSK has been struggling in the US market, where sales of its respiratory medications have declined.
According to a GSK spokesman, the company’s restructuring program aims to make the company less complicated, more streamlined and efficient.
Ms. Connelly is expected to announce GSK’s plans to US staff later this week. (Photo: GSK)
GSK’s respiratory drugs, led by asthma and chronic lung disease, Advair, have been its best sellers. Advair sales in the US are plunging, while Anoro and Breo, its new lung medications are not taking off as well as expected.
Advair has faced fierce competition from rival products, while health insurers in the US have been forcing companies to offer discounts for their older drugs.
Sanofi, France’s largest pharmaceutical company, says US insurers are squeezing its diabetes medication’s profit margins.
US insurers are themselves under pressure to keep premiums down. Respiratory illnesses and diabetes are two areas where doctors and patients have a range of cheaper options.
Following accusations and fines for corruption in various parts of the world, GSK stopped setting its sales reps sales targets. Many analysts say this could be a reason for the company’s poor performance in the US.
GSK employs 99,000 workers globally, with 17,000 of them in the United States. Nearly one third of all its sales come from the US.
Since the beginning of this year, GSK shares have fallen by about 8%.