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GSK announces $1.4B cost-cutting amid slipping global sales

Pharmaceutical giant GlaxoSmithKline, which employs about 5,000 in the Triangle, announced a $1.4 billion cost-cutting strategy over three years amid slipping sales and global competition.

London-based GSK did not specify how many people would lose their jobs in its latest round of cuts.

“The year 2014 has been painful for GSK as we have absorbed these impacts in the US, but we have adjusted quickly to this situation,” CEO Andrew Witty told journalists in a conference call. “That is where we have focused our attention to targeted expense reduction.”

The company said global sales fell 3 percent to $9.4 billion in the third quarter and core operating profit also slipped. The decreases were driven by falling sales of the company’s best-seller, asthma inhaler Advair, which GSK is trying to replace with new respiratory medications.

GSK will also spin off its HIV business and plans to acquire a vaccine business from competitor Novartis as part of an ongoing restructuring. The Novartis deal will swell GSK’s workforce by 14,000 new employees, Witty said. The company currently employs 99,000 people in 115 countries.

Witty also said GSK expects to have the first Ebola vaccine doses available “before the end of the year.” GSK, Johnson & Johnson and others are in a race to develop therapies for the deadly virus outbreak that has claimed more than 4,500 lives in Africa.

GSK’s stock closed Wednesday at $44.41, up 78 cents. The shares are down 17 percent this year.

In an ongoing problem that was finally resolved, last month GSK was fined $500 million by Chinese authorities in connection with a bribery scandal in that country.

The drug developer and manufacturer employs 4,500 at its North American headquarters in Research Triangle Park and about 500 at its manufacturing facility in Zebulon. The company makes and packages more than 20 medications here, including Advair and Flovent.

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