Job cuts loom as Glaxo revamps U.S. operations
LONDON, Nov 4 (Reuters) - GlaxoSmithKline (GSK.L) staff in the United States are braced for further job cuts as Chief Executive Andrew Witty prepares to announce a reorganisation of pharmaceutical operations in the group's biggest market.
A Glaxo spokeswoman confirmed there would be an announcement shortly but declined to give details.
Top management is due to meet with staff on Wednesday, when executives are expected to detail plans to streamline the U.S. business.
Witty said on Oct. 22 he was looking at all aspects of Glaxo's U.S. operations, including the sales team. He added he was not convinced that the current model -- based on very frequent sales pitches to doctors -- was sustainable.
British-based Glaxo, the world's second biggest drugmaker, has already announced a series of cutbacks in various parts of its business. Earlier this year, it announced plans for 1,200 job cuts in research and development.
But to date it has stopped short of the draconian lay-offs seen at some U.S. rivals.
Merck & Co (MRK.N), for example, last month announced it was axing 12 percent of its workforce, or 7,200 posts, in addition to 10,400 jobs slashed in an earlier restructuring.
Drug companies worldwide have eliminated thousands of jobs in the past two years as a lack of significant new drugs, declining sales of lucrative flagship franchises and fierce competition have cut into profits.
Pfizer (PFE.N) and Bristol-Myers Squibb (BMY.N) are among other leading firms to have cut their tally of sales representatives significantly.
In the United States, which is the world's most profitable market for prescription drugs, the changing environment is forcing all drug company executives to rethink radically the way they do business.
"It's pretty clear to me that we are seeing a market in a pretty fundamental phase of transition over a period of time," Witty told analysts in a third-quarter results call last month.
"This is a perfect moment for us to really ensure we've got the right approach to that kind of evolving marketplace that we see in the future."
(Editing by Elaine Hardcastle)
