In news that the market read as ominous, GlaxoSmithKline wouldn't forecast its 2009 numbers. And in news that Glaxo employees must have considered ominous, the company confirmed its intent to cut more jobs--and in the new spirit of withholding info, refused to estimate how many.
Here's the thing: The last time Glaxo unveiled a restructuring plan, it aimed to cut £700 million (about $1 billion) out of its cost structure. That led to a layoff of about 10,000, the company said. Now, the drugmaker wants to cut another £1 billion ($1.45 billion) and won't say how many jobs would get the ax. "We will not be providing targets for job reductions and we will announce restructuring outcomes once employees, relevant works councils and trade unions have been consulted and informed," was all Glaxo would say in its earnings report.
Media sources have reported up to 10,000 lost jobs, or about 10 percent of the company's remaining workforce.
CEO Andrew Witty explained his reluctance to crystal-ball the year ahead by saying, "We are now in a pivotal period of change as we redefine our business model." He emphasized that the omission wasn't related to the company's performance.
The company was more forthcoming about last quarter, which wasn't pretty, but wasn't awful, either. Sales grew to 6.91 billion pounds from £5.97 billion, or 16 percent in terms of that currency (including forex, revenues grew 7 percent). Profits, however, took a year-over-year hit, falling about 10 percent to £1 billion ($1.46 billion). That includes a one-time charge of $400 million to settle claims from an off-label marketing probe. Witty also blamed higher R&D expenses and higher spending on sales for the decline.
Does that blame forecast where the additional job cuts might come? There's no way of knowing for sure, but as we all know, sales and marketing has been under the ax at company after company. Glaxo rival Pfizer has also cut into its research operations. We'll have to wait for more specs on Glaxo's layoffs, so stay tuned.
- here are GSK's results (.pdf)
- read the story in BusinessWeek
- get more from CityWire
- check out the Associated Press article