GSK to ax hundreds of jobs through manufacturing shuffle
- GlaxoSmithKline is in the midst of a manufacturing shake up that stands to pump millions of dollars into a few of its drugmaking sites, yet also eliminate hundreds of jobs.
- Three plants, located in the English towns of Ware and Barnard Castle, as well as the Scottish town of Montrose, are receiving more than £140 million ($182 million) combined from the big pharma in order to expand production of HIV and respiratory medicines.
- GSK also intends to outsource work from its facility in Worthing, and sell off Horlicks malted milk drink brand in the UK — moves the company expects will lead to roughly 320 permanent job cuts over a four year period.
GSK has been revamping manufacturing in its homeland for quite some time. Since 2012, the company claims to have invested northwards of £1.2 billion (about $1.6 billion) in various pharmaceutical- and consumer health-focused centers.
Included in that figure is the £275 million ($357 million) the company committed last year to spend on its Ware, Barnard Castle and Montrose sites to boost production of respiratory and large molecule biologic drugs.
The increased attention makes sense, given the company's main revenue drivers. GSK's respiratory franchises, for instance, brought in £6.5 billion ($8.4 billion) in 2016, a 2% increase under constant exchange rate and a 13% increase under an actual exchange rate from the year prior. In 2015, GSK threw more than £2 billion ($2.6 billion) into new equipment, properties and manufacturing plants.
"We have a substantial manufacturing presence in the UK and continue to support the network with new investment of more than £140 million in the next three years," Roger Connor, GSK's head of global manufacturing and supply, said in a July 19 statement. "At the same time, we have had to make some decisions which we know will cause uncertainty for some of our employees."
The newer £140 million ($182 million) investment will come between 2017 and 2020.
GSK also announced on July 19 it is reviewing strategic options for its cephalosporin antibiotics business, with the potential for a sale, which would in turn affect the production sites that manufacture the drugs.
The outsourcing planned for the company's Worthing site comes about a year after the Food and Drug Administration issued a warning letter about it that stemmed from a July 2015 inspection. The agency flagged, among other problems, the facility's inability to "prevent cross-contamination from dedicated penicillin manufacturing area to non-dedicated areas."
- GlaxoSmithKline Statement
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