GlaxoSmithKline is looking to unload some marginal businesses and make other cuts that it says will cost about 320 manufacturing jobs in its home country over the next three years. In addition, the company is canceling plans to build a new biologics plant there that would have resulted in about 500 new jobs.
The drugmaker was emphatic that its decisions have nothing to do with the U.K. pulling out of the European Union and even tried to soften the news by saying it will invest about £140 million ($182 million) in its U.K. manufacturing network by 2020.
That, however, is spread among five sites: Ware, Hertfordshire, Barnard Castle, County Durham and Montrose, Scotland. That's on top of about £1.2 billion ($1.5 billion) the company has committed to its U.K. manufacturing operations since 2012, it pointed out.
“We have a substantial manufacturing presence in the U.K. and continue to support the network with new investment of more than £140 million in the next three years.” Roger Connor, president of GSK global manufacturing and supply, said in a statement. “At the same time, we have had to make some decisions which we know will cause uncertainty for some of our employees. We will do all we can to support them through this process.”
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The U.K. drugmaker says it will sell its Horlicks brand in the U.K., and intends to close a site in Slough that currently produces the nutrition products for the U.K. market. It is also looking to sell its MaxiNutrition brand. Combined, the two brands generate about £30 million in sales in the U.K. GSK is keeping Horlicks in India, where it performs much better.
In addition to closing the Slough site, GSK will outsource some work currently done at its facility in Worthing, a plant that has faced regulatory challenges. That decision also will factor into the 320 job cuts. The company said it will immediately begin required “employee consultation” at Worthing and Slough.
But the job uncertainty does not end there. GSK said it also is looking at selling its cephalosporins antibiotics business and the plants where those products are made. That business includes its Zinnat/Ceftin, Zinacef and Fortum brands, which are produced in part of its Barnard Castle site, in Verona, Italy, as well as at its site in Ulverston in Cumbria. GSK says it will continue to manufacture other antibiotics, including Augmentin, and will continue to conduct research on new antibiotics.
But its decision does have deeper implications for the Ulverston site, which was slated to get a new biologics plant.
GSK made a big deal in 2012 about its decision to invest about £350 million in building a new large-molecule plant in Ulverston in the North of England after Parliament enacted tax reforms benefitting large manufacturers. It was supposed to be the first new GSK manufacturing facility to be built in the U.K. in almost 40 years. Today, GSK said it is halting plans for that facility because it no longer needs the additional capacity.