Merger Raises Fear of Job Drift to U.S.

Glaxo Wellcome and SmithKline Beecham, the United Kingdom's two leading science-based companies, announced on Monday that they will merge to form the world's largest pharmaceutical company, Glaxo SmithKline. The new company's operational headquarters will be located in the United States, and unions are predicting that a total of 15,000 jobs will be lost across the companies' global workforce of 107,000--between 2000 and 5000 of them in Britain. However, most of the cuts are likely to be duplicated administrative positions. This means, says Peter Cotgreave, director of Save British Science (SBS), that research jobs in the new conglomerate remain safe and may even expand.

Glaxo Wellcome employs over 9000 scientists worldwide. Its product strengths are in asthma treatment and antivirals for HIV and hepatitis. SmithKline Beecham has about 4200 R&D employees worldwide, 2000 of them based at their recently opened research site in Harlow, Essex. Its products cover the therapeutic areas of antidepressants, vaccines, and diabetes. "The biochemical expertise of Glaxo Wellcome and the genomics expertise of SmithKline Beecham will complement each other very well," says Cotgreave. He adds that in his view, it is preferable for these two companies with strong British bases to merge rather than be taken over by American or European companies.

But others fear that the proposed relocation of Glaxo SmithKline's operational headquarters to the United States signals an impending shift of the R&D effort away from the United Kingdom. Speaking last Friday, before the merger announcement, Roger Lyons, general secretary of the Manufacturing Science and Finance union, spoke out against the plan, calling it "bad for the employees, bad for British science, bad for the development of new drugs, and bad for the British economy as a whole."

Cotgreave disagrees. He tells Next Wave that "there is no evidence that research will be repatriated to the U.S., and both companies have said that R&D jobs are safe." In fact, SBS is upbeat about prospects for R&D in the United Kingdom. "It looks as though there won't be any real-terms reduction in R&D expenditure. In fact, it may actually increase because of savings made through doubling up," says Cotgreave. The companies are predicting that the merger will save about £250,000, and they have promised to plough the savings back into further research.

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