News & Observer | newsobserver.com | Triangle won't be spared GSK job cuts

Published: Dec 01, 2007 12:00 AM
Modified: Dec 01, 2007 03:01 AM

Triangle won't be spared GSK job cuts

Timetable, number of affected jobs unknown

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Cutbacks that GlaxoSmithKline began about a month ago in Puerto Rico have reached Triangle operations.

"People have been notified," said Nancy Pekarek, a spokeswoman from GSK's Philadelphia office. Pekarek, who was visiting the Research Triangle Park headquarters this week, declined to say how many jobs would be affected locally and over what time the cuts would take effect.

The British drug maker employs about 6,000 workers in the Triangle. About 4,800 executives, researchers and marketing personnel work in RTP, and more than 1,100 employees in Zebulon produce and package about $5 billion worth of drugs annually, including Imitrex for headaches and Advair for asthma. The Zebulon plant is one of GSK's largest production facilities and the town's largest employer.

The company announced plans Oct. 24 to save up to $1.4 billion in annual costs through job cuts over three years. The same day, it tagged its manufacturing site in Cidra, Puerto Rico, for closure. The plant employs about 900.

The cutbacks are part of a global restructuring program that GSK started a few years ago to regularly shave jobs in underperforming areas and invest in growth areas, such as the development of cancer treatments and vaccines.

GSK boosted its restructuring program after sales of its diabetes pill Avandia plummeted in the second and third quarter. A study in May in the New England Journal of Medicine linked GSK's second-best-seller to an increased risk of heart attack.

Like other large drug makers, GSK has been losing sales to generic competitors and struggling to win approval for money-making treatments amid tougher regulatory scrutiny. Pfizer, Bayer and AstraZeneca have announced cutbacks, and Bristol-Myers Squibb has started them.

According to local GSK employees, the company has asked supervisors to reduce their budgets for personnel costs by certain percentages. Usually, a hiring freeze is implemented to help make the targets, Pekarek confirmed. Some employees might be reassigned. Others might take early retirement. And some will be laid off.

Because the restructuring program is global, Pekarek said, she isn't keeping track of head-count changes at particular sites, such as the Triangle.

Job cuts are likely to hit research and development, marketing and administration first, she said, and manufacturing later.

She would not comment on speculation among Zebulon employees that the plant's work force could be cut by 6 percent.

Zebulon officials had hoped the plant would be spared because GSK had been investing and adding jobs there. In 2005, it agreed to invest $92 million in the plant and create 200 jobs over four years in return for $4.4 million in state and local incentives. As of Jan. 1, the company had invested $88 million and created 96 jobs.

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