GSK has announced plans to shut its main research and development hub in Stevenage and open a new flagship site in Cambridge, aiming to cut costs by £1.9 billion over three years to fund investment.
Impact on Staff
Around 1,800 staff currently work at the Stevenage R&D site in Hertfordshire. The new 300,000sq ft centre in Cambridge will house more than 1,000 scientists, with a phased relocation for staff by 2029. Some employees will move to GSK's nearby Ware site, which is set to be upgraded. GSK hopes all Stevenage workers will relocate to either Cambridge or Ware.
Investment and Cost Savings
The group is spending £400 million over the next three years on the changes. Annual costs are expected to be cut by £1.9 billion over the same period to fund the investment, ramp up R&D, and offset the impact when its key HIV treatment dolutegravir goes off patent. Some roles, particularly in support services, may be affected, but GSK did not confirm exact numbers.
Executive Comments
Luke Miels, chief executive of GSK, said: “To fund investment in the late-stage portfolio and R&D, we are starting a three-year cost savings programme to simplify the organisation and to reallocate capital and resources. Savings will primarily be reinvested, with some used to improve margins and profitability in the dolutegravir patent expiry period.”
He added: “This investment will accelerate our R&D and help us deliver new, competitive products. It integrates GSK further into one of the world’s leading centres of knowledge and demonstrates the attractiveness of the UK’s life sciences ecosystem.”
The new R&D centre is being developed by Prologis within the Cambridge Biomedical Campus, one of the largest of its kind in Europe.
Ongoing Job Cuts
Tony Wood, chief scientific officer at GSK, said: “The campus provides exceptional opportunities for collaboration. With our existing connections and experience, we see this move as a catalyst for faster, bolder medicines discovery by accelerating the science that matters most for GSK’s next wave of medicines.”
GSK has already been cutting jobs at its Stevenage site as part of an ongoing overhaul of its global R&D division. In February, it confirmed around 350 R&D jobs were being cut across the US and UK, with more than 2,500 workers based at Stevenage at the time.
Financial Results
The FTSE 100 firm’s half-year results showed underlying core operating profit rose 8% on a constant currency basis to £5.45 billion, with turnover up 5% to £16.04 billion. On a statutory basis, half-year total earnings fell 31% to £2.77 billion.
