The future of GlaxoSmithKline’s Sligo plant in Ireland has been uncertain for many years. Now it’s settled: The U.K. company will close the plant and lay off its 165 workers over the next three years.
In an announcement to employees on Thursday that was shared by the company, it said the plant had improved its cost efficiency over the years but that sales of its skincare products have not met projected demand. GSK called the “current business model unsustainable.”
Glaxo considered alternative uses for the plant but said they were unworkable “without significant further investment.”
“We informed employees at our skincare manufacturing site in Sligo of a proposal to close the site. Under this proposal, which affects 165 employees, we would phase down production over three years, before decommissioning the site in the latter part of 2021,” Glaxo said in its announcement.
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GSK considered shuttering the plant after getting it in a 2009 deal to buy dermatology specialist Stiefel Labs. Instead of closing it then, GSK in 2012 committed to investing about $12.9 million in upgrades.
GSK has been making cuts to its manufacturing network for several years as it trims businesses to save costs. Last year, it said it would unload some marginal businesses and make other cuts that would cost about 320 manufacturing jobs in its home country over the next three years. In addition, the company canceled plans to build a new biologics plant there that would have resulted in about 500 new jobs.
It cut an unspecified number of jobs at its Barnard Castle manufacturing site in the U.K. earlier this year.