Glaxo Wellcome to Cut 3,400 Jobs

Drug maker Glaxo Wellcome said it will cut 3,400 jobs, or 6% of its global work force, in an effort to trim costs and improve profit margins by streamlining its manufacturing operations. Half the job losses will be in Britain, where the company has been involved in a battle over the government’s expected refusal to allow Glaxo’s new flu drug, Relenza, to be paid for out of national health coffers. The British company, whose other products include the ulcer drug Zantac and AIDS drug Retrovir, said none of the cuts will be made in the U.S. Glaxo announced its move after a yearlong review of 54 of its manufacturing sites in 31 countries. It said the restructuring is “in keeping with worldwide trends among major pharmaceutical companies who are operating in an increasingly tough business environment.” The cuts, which amount to 16% of the company’s manufacturing jobs, are expected to boost earnings in 2000 and “will build to an annual benefit of some $611 million per annum in 2003,” the company said. The restructuring will cost about $860 million. Manufacturing is seen as a major source of potential cost savings in the drug industry, which has often used the creation of production facilities as a way to gain access to new countries and markets. Glaxo’s American depositary receipts fell 56 cents to close at $52.88 on the NYSE.