Glaxo to shed 4,000 jobs as Asia beckons

PHARMACEUTICALS behemoth GlaxoSmithKline will reveal 4,000 further job cuts this week, the majority of which are expected to fall in North America and Europe.

The redundancies follow 8,000 job losses announced by rival AstraZeneca last week, and reflect the pressures facing the drugs industry as well as a shift of focus away from slower-moving western economies towards emerging markets.

Glaxo, which produces well-known consumer goods such as Aquafresh toothpaste and Nicorette gum, is expected to confirm the cuts as it publishes its full-year results on Thursday. Analysts believe the group will swing back to profit growth after an 11 per cent decline in 2008, boosted by £835m sales of its swine flu vaccine in the fourth quarter alone.

Overall profits are predicted to be 12 per cent up at £8.7bn, with sales of £28.2bn. The firm is is expected to set out plans to invest heavily in R&D.

However, Glaxo faces one of the steepest “patent cliffs” of the large pharmaceuticals manufacturers. Low-cost competition to its Arimidex cancer drug and Pumicort asthma product are expected to push sales into negative territory in 2010, while three more of its best-selling drugs face generic competition by 2014.

The company aims to create £1.7bn cost savings annually by 2011.

Chief executive Andrew Witty, who looks after a global workforce of 99,000, is increasingly casting his eyes to consumer bases in China and India where he believes there is potential to rapidly boost sales.