WRAL Tech Wire

In his own words: As GSK prepares for cuts, CEO isn’t ‘stressed’

Andrew Witty

Related Blog Posts

• GSK profits soar, but CEO discloses major cuts
• GSK layoffs target North American, European work force
• Transforming GSK - Top exec spells out his strategy, vision for drug maker

On The Web

• GSK
• Seeking Alpha's GSK call transcript
• Local Tech Wire at Twitter - sign up today for latest news alerts

Site Search

Get the latest news alerts: Follow LTW at Twitter.

Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – Drug giant GlaxoSmithKline (NYSE: GSK) announced a 66 percent surge in profits along with plans to slash research and development spending on Thursday. The R&D cuts will mean the loss of several thousand jobs, according to media reports in the U.K., where GSK is based.

Such cuts are likely to hit GSK’s North American headquarters in RTP where more than 4,000 people work. And many are involved in R&D. Hundreds of positions have already been phased out over the past two years. (See LTW coverage here about earnings and here about layoff reports as well as Witty's strategy.

But is Chief Executive Officer Andrew Witty frustrated by what he is encountering as he continues his two-year campaign to reorganize GSK?

Here’s an interesting segment from a conference call Witty and other GSK executives had with analysts on Thursday.

Question from Michael Leacock, RBS:

“It's Michael Leacock from RBS. Andrew, I think awhile ago you said that one of your key objectives was to simplify the organization. But that was causing you some degree of frustration. I just wondered and held being making progress there. And also just for Julian, just in terms of CapEx in the longer-term, you got this mix of out-sourcing and in-sourcing manufacturing in R&D as well as the mix of emerging markets coming in, how did you get it started a little bit to where you expect your overall CapEx to be for the longer-term, not just asking for 2010 number?"

Witty’s reply:

“Okay. So, on the first one, Michael; I don't look stressed today, do I? No. So, I'm actually, I think, we've made a lot of progress in the last six or eight months on the simplification agenda. Particularly around system selection and standardization, particularly around, and in our simplification of our above country operations, so what we want to get done outside of the subsidiary versus what we want to get done inside.

“There's a lot of work still to go, but I think we have got a very highly agreed, actually, roadmap of where we are going in terms of systems, in terms of global business services, in terms of service levels, in terms of the kind of resources we're going to need or not need going forward. So, I think, a lot of execution to get done and a lot of, obviously, therefore, the benefits to flow.

“But I think, we've broken the back of the architecture of what we want. And I feel pretty good about that, actually. So no; I'm feeling okay about that.”

For a full transcript of the call as provided by Seeking Alpha, click here.
 

Editor's Blog

The latest blog posts from our WRAL Tech Wire and WRAL editors. Read more articles…