Glaxosmithkline 'set to axe jobs'

Drugs giant Glaxosmithkline is set to axe thousands of jobs when it announces its full-year results this week, it was reported today.

The pharmaceuticals company is thought to be planning a worldwide employee cut, potentially including some UK staff, as the industry faces growing challenges from cheap generic medicines, according to reports in the Sunday Telegraph and Observer.

The Sunday Telegraph said as many as 6,000 staff across the globe could be affected, while the Observer put the figure at around 10,000, or 10% of Glaxo's workforce.

Competition from generic rivals to the firm's key brands, such as bipolar and epilepsy treatment Lamictal, and ongoing weakness for its under-fire diabetes drug Avandia could have hit sales, according to Charles Stanley analyst Jeremy Batstone-Carr.

The company has already been cutting jobs to help make savings and aims to shave £700m (€798m) off its annual cost base by 2010.

Glaxo employs around 100,000 people worldwide.

Glaxo's results on Thursday are expected to show that the firm has benefited from the weakness of the pound.

The group is one of the largest dollar earners in the FTSE 100 Index, which is likely to have helped boost figures.

On an operational basis, Mr Batstone-Carr forecast the results to show a slight drop in underlying sales and earnings compared to 2007 and with foreign exchange movements stripped out.

He is predicting pre-tax profits of £6.86bn (€7.82bn) in 2008, down from £7.45bn (€8.5bn) in 2007.

Rival AstraZeneca confirmed plans to slash another 6,000 jobs this week, bringing the total cut to 15,000 across its global operations.