Drug companies join up
Merger mania means job cuts
FIVE thousand workers in Britain will pay the price for boardroom celebrations over the merger of two of Britain's biggest drug companies. Glaxo Wellcome and SmithKline Beecham announced a merger last week. The deal will create the biggest drugs company in the world. While shareholders toasted the bonanza the deal promises them, thousands of the companies' workers face the threat of life on the dole.
The first act of the new company, Glaxo SmithKline, will be to "downsize" the workforce, axing 15,000 jobs out of its 105,000 worldwide workforce. An estimated 5,000 jobs are under threat in Britain. SmithKline's chief executive Jan Leschly will also be leaving the company. But he has no worries over his future, and won't be signing on at the local dole office. His early retirement package leaves him with �90 million worth of shares.
The PR spin talks of the deal making the company a "British" world beater. Funny, then, that the new company is moving its operational base and key research facilities to the US. Merger mania has swept the drugs industry recently. As well as cutting jobs and costs the mergers are about power and money, not curing diseases that kill millions. Mergers create companies with more clout that can take on governments over drug pricing and the length of clinical trials.