GSK jobs on the line as pharma giant announces £1bn cost-cutting plan

GSK will also float off a part of its ViiV Healthcare division focusing on HIV treatments with an eye for a future sale

Researchers in a GlaxoSmithKline laboratory (Rex Features)

Britain’s biggest drugmaker GlaxoSmithKline has set out plans to “fundamentally re-shape” the business - with jobs on the line as the pharmaceuticals giant aims to cut costs by £1 billion.

Brentford-based GSK saw turnover slump 14 per cent to £16.8 billion in the first nine months of the year, and operating profit was down 37 per cent to £2.9 billion.

As chief executive Sir Andrew Witty set out plans to save £1 billion in the next five years, he said: “of course it will affect jobs worldwide, but given the huge investment we are putting in here in Britain, on factories and research centres, and my expectation is the total number of jobs in this country will not be going down.”

GSK will also float off a part of ViiV Healthcare, the division Witty set up five years ago to focus on HIV treatments, with an eye for a future sale.

Witty shrugged off talk that his own job is under pressure, saying: “It would be disingenuous of me to say I’m not disappointed by some of the pressures we’ve faced this year, but it happens.

"Look at what we’re able to achieve - the first vaccine for malaria, the first vaccine for Ebola potentially, the [$16 billion ] Novartis transaction [to swap assets and combining their consumer health units.].”

Glaxo is working on a potential Ebola vaccine and Witty said: “we are leaving no stone unturned; I fully expect GSK to be first company to make the first vaccine available, to government healthcare workers by the end of this year.”

In China, where Glaxo was hit by an embarrassing bribery scandal and fined nearly $500 million, GSK’s sales returned to growth, but it was stung by a major slump in sales of best-selling asthma drug Advair, and generic competition elsewhere.

But the quarterly dividend was kept unchanged at 19p, despite fears it would be cut, and GSK topped the FTSE with shares up 43p to 1384p.