Glaxo packs up a tablet packaging line in Australia

GlaxoSmithKline ($GSK) is pretty proud of its rotacaps and its blow-fill-seal lines at its packaging plant in the Melbourne, Australia, suburb of Boronia. Its tablet line, not so much, and the drugmaker will eliminate that line and lay off about a third of the workforce at the facility.

The U.K. company said Wednesday that it would shut down the tablet packaging operation and whack about 120 of the 363 workers. Layoffs won't happen immediately due to regulatory requirements of drug markets the company will have to work through. Troy Webb, Boronia site director, said GSK would concentrate instead on the high-tech manufacturing used for its respiratory and sterile liquid medicines.

"Despite continuing challenges in the operating environment in Australia, our vision is to be the GSK center of excellence worldwide for supplying low cost unit dose, blow fill seal and dry powder inhalation medicines," Webb said in a company announcement. In a brief email, GSK spokeswoman Lisa McGuire said those challenges "are predominantly high Aussie dollar and wage costs." The Australian said those factors have taken a hard toll on the country's manufacturing base.

Australia is not the only place where challenging economics are leading GSK to cut jobs. Last year GlaxoSmithKline saw revenues fall 3% globally but further, 7%, in Europe. CEO Sir Andrew Witty said the GSK workforce there would have to be adjusted as a result. He has also said the company is looking to cut costs across its manufacturing network and in inventory control.

- here's the announcement
- read the Australian story (sub. req.)