December 3, 2014
By Riley McDermid, BioSpace.com Breaking News Editor
GlaxoSmithKline said Wednesday that it will lay off 900 jobs in North Carolina’s Research Triangle Park as part of a $1.6 billion streamlining of the company away from research and development and towards developing its existing drug pipeline.
Glaxo said in a Worker Adjustment and Retraining Notification letter filed with the state that 350 of those employees will lose their jobs in the first quarter of 2015, while an additional 450 will lose their jobs in the three month period after that round. The remaining employees targeted will be laid off later in 2015, said the WARN letter. The most likely candidates to lose their jobs are biologists, chemists, statisticians, engineers, clinical development scientists and others, predicted analysts.
The company stressed that at least some of the North Carolina jobs will be relocated elsewhere, with a many as 450 potentially finding jobs with suppliers like Parexel International .
“Also, GSK and Parexel have signed a letter of intent regarding the creation of a dedicated GSK business unit within Parexel,” said the firm. “It will provide a variety of clinical development services and be largely based in the RTP area. Under the agreement, approximately 450 employees currently working in R&D in RTP will be offered roles at Parexel.”
The cuts are part of a global restructuring announced last month that the company said could save it more than a billion dollars in annual expenses over three years.
“Some R&D roles will be relocated to the Philadelphia area and some staff will be offered relocation,” the company said in a statement emailed to BioSpace. “We will be working with local employers to support staff securing re-employment. In the US, we are reshaping and reducing the size of our commercial and R&D operations (now 17,000 employees) to be more agile to flex with shifting market demands.”
Glaxo swill now be concentrating its drug research work in the Philadelphia area, said a Glaxo spokesperson.
“Cuts are not being made across the board but are strategic, focused changes to allow GSK to operate more efficiently,” said the company. “This is not a change in our strategy, which has helped us deliver more new medicines than any other company in the industry in the past 18 months. This is a rescaling of work to reflect market forces that were anticipated but that have accelerated and are affecting the entire industry.”
The indecision over when and where Glaxo would make its cuts has frustrated many insiders, as well as biotech community members concerned about how to plan their next moves. “Shocking lack of information being conveyed by #GSK,” tweeted Charles Henry, whose Twitter handle describes him as a “scientist by profession.”
Glaxo has struggled in recent months as sales of its respiratory drug Advair have skidded 14 percent globally from the first nine months of 2013 compared to the same period this year. Sales for the same drug dropped 24 percent in the U.S. during that same period. But Connelly said the firm would work hard to spread the cuts throughout the company’s American territory.
“The reduction of jobs in our US Pharmaceuticals business will affect employees in Philadelphia, RTP and the field,” said the statement. “Retail sales teams focused on launching new medicines to the market will largely not be affected. Our proposed changes to R&D will sharpen the focus in discovery and development and reduce funding in certain areas of the pipeline.”
Popular biotech blogger Derek Lowe reported this morning on his Corante blog that the restructuring was a major blow to an industry currently facing the highs and lows of booming capital markets and rapidly restructuring global companies.
“GlaxoSmithKline itself seems to have basically exited North Carolina, which is a damned shame. That site has a long history, and a lot of good work has been done there,” said Lowe.
