Glaxo CEO Walmsley's Shakeup Continues With Job Cuts in Africa

(Bloomberg) -- GlaxoSmithKline Plc is cutting jobs in Africa and restructuring in more than two dozen countries across the continent, reversing earlier expansion efforts as new Chief Executive Emma Walmsley tries to make the U.K. drugmaker more competitive.

Glaxo will stop marketing and promotion to health-care professionals, relying instead on distributors in 29 sub-Saharan markets, the London-based company said in an emailed response to questions Wednesday. The move will lead to job losses, a spokesman said, declining to give a number. Glaxo said it will continue to work with industry partners, governments and other organizations to ensure its products remain available locally.

Since taking the reins in April, Walmsley has announced plans to terminate or divest more than 30 drug-development programs and offload 130 brands while Glaxo takes steps to pare costs as well as rejuvenate its research and development. She’s also revamping the top ranks of the company, and has already replaced about 50 of 125 managers as she seeks to change its culture and kindle innovation.

New Model

The African retrenchment comes less than four years after Walmsley’s predecessor, Andrew Witty, unveiled plans to invest as much as 130 million pounds ($179 million) on the continent and create at least 500 jobs. That was meant to build on Glaxo’s existing business Africa, which at the time employed about 1,500 people in more 40 countries, including at manufacturing sites in Kenya, Nigeria and South Africa.

Patients’ access to Glaxo’s products won’t be affected by the shakeup, according to the company. Glaxo plans to keep running its local operations in Kenya and Nigeria. The South African business, managed by Aspen Pharmacare Holdings Ltd., will continue, and the company said it will retain offices in Ivory Coast and Ghana.

The drugmaker said the restructuring follows a decision last year to create a new operating model for its emerging markets business to boost its competitiveness. 

Glaxo shares rose 1 percent to 1,368 pence at 1:57 p.m. in London.

To contact the reporters on this story: James Paton in London at jpaton4@bloomberg.net, Janice Kew in Johannesburg at jkew4@bloomberg.net.

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Marthe Fourcade, John Lauerman

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