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GSK denies China job cutting rumours

Published on 27/01/15 at 03:01pm
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GlaxoSmithKline has told Pharmafile that the news and rumours circulating about 1,000 employees facing the axe in China are not true.

They were started by Chinese newspaper Caixin, claiming that GSK’s China operations were about to lay off around 1,000 employees – which it says came from several sources close to the company.

The paper cited the reasons for the cull were due to the “British drugmaker dealing with a sales slump in the aftermath of a bribe scandal”.

However, GSK contacted Pharmafile to tell us: “GSK has a long term commitment to China and we are continuing to refine our portfolio so that we focus on areas where we can truly make a difference to China and the Chinese healthcare sector.”

In response to the specific claims that it will be reducing its headcount in the country, GSK disagrees: “We’re not reducing the size of our team. In fact, we will need to hire more people in order to meet the needs of our future business.”

Although clearly not wishing to rule out such a move in the future either way, it concludes GSK will “continue to realign our resources to build a highly efficient and sustainable business”.

Caixin and other reports in the media had said prior to this regarding 2015, that "In the first quarter, 450 employees will be cut, and the number will be higher in the second quarter. The employees were awaiting details of compensation plans.”

Such a reduction would indeed surprise many as China is set to be the biggest country for pharma growth in the 21st century, due to its rising levels of chronic disease, an ever-growing ageing population and an increasing hunger for Western medication.

But whilst big pharma has much to gain, the Chinese market is no pushover, thanks to an attentive government, strong local competition and, among other issues, ongoing decreases in the prices of drugs.

For GSK the news of any job losses would arrive ahead of a major pact with its Swiss rivals Novartis that sees the manufacturers combine their consumer health units under GSK’s majority (63.5%) control, while also in effect swapping some of their major assets.

This rebuttal by the firm is in contrast to a previous headcount reduction announcement made just in December, when it acknowledged and confirmed reports of the cutting of hundreds of US jobs as a result of the UK company struggling to make headway in its respiratory market.

Brett Wells

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