March 9, 2015
By Mark Terry, BioSpace.com Breaking News Staff
After at least 135 employees of GlaxoSmithKline were laid off in China last week, about half of them are reportedly planning to appeal to Chinese labor authorities.
On Friday, March 6, GSK indicated that it had taken disciplinary action against the workers for misconduct that occurred prior to mid-2013 at their China facilities. According to sources, at least 110 people were fired.
In support of their appeal, the laid-off employees said GSK acted without “producing any evidence of compliance violations to the employees,” and didn’t offer “any compensation or reasonable communications.” They also indicate they want to negotiate compensation, go back to work and recover their reputation.
GSK has been having difficulties in China. On Jan. 22, 2015, the company announced it was laying off about 1,000 workers in its China operations. These layoffs were in response to decreased revenue. China operations reported a drop of 61 percent in the first three quarters of 2013. Global revenue fell 11 percent in the first three quarters of 2014.
In addition, the company was mired in a bribery scandal much of 2014. On Sept. 19, 2014, the Changsha Intermediate People’s Court in southern China fined the company $500 million on the charges. It sentenced former GSK China’s general manager, Mark Reilly, as well as four other company managers, to up to four years in prison. The sentences were suspended and Reilly was immediately deported.
The initial bribery allegations occurred in 2012 when 23 anonymous emails were sent to Chinese officials. Other biopharma companies have also conducted layoffs in China. Bristol-Myers Squibb Company laid off about 1,000 employees in China in November, 2014, including 10 senior managers. The U.K.’s AstraZeneca PLC and U.S.-based Merck Sharp & Dohme have also been cutting their China workforce over the last two years.
Although GSK has declined to comment on specifics about the current layoffs, it has stated that it has upped its monitoring of expense claims. It has also hired an independent legal firm and external consultants to review its China operations.
In the company’s annual report, it indicated it has been pushing an anti-corruption policy and that as a result, almost 4,000 employees were disciplined last year for policy violations. The bulk of those were related to attendance or payroll problems. Of the 4,000 workers, 373 were fired, 233 of them resulting from “violations related to sales and marketing codes. Code of conduct violations in China jumped from 48 in 2013 to 652 in 2014.
BioSpace Temperature Poll
Vertex Pharmaceuticals made news last week when it terminated leases on three properties in Cambridge, Mass, that freed up 313,000 square feet of space in the Genetown area. The company has spent a significant part of 2014 consolidating its operations on the South Boston waterfront, leasing 291,000 square feet of office space at West Kendall Street in Cambridge’s Kendall Square. So we wanted to ask the BioSpace community: Is Boston going to be getting more biotech leases anytime soon, or fewer tenants?
