GlaxoSmithKline Plc share price down, to eliminate 900 positions in the US amid cost-cutting efforts

The largest drug maker in the U.K. – GlaxoSmithKline Plc – announced its intentions to eliminate 900 jobs in North Carolina. The move comes as part of the companys plan to cut expenses by a total of £1 billion ($1.57-billion) over three years.

A spokesman of the company wrote in an e-mailed statement, which was cited by Reuters: “This is a significant programme and will result in the loss of several hundred employees in the U.S. commercial business and a similar number in R&D activities based in the U.S.”

According to GlaxoSmithKlines statement, the company will cut jobs in the U.S. as part of its global reorganization strategy to establish a smaller and more focused organization operating at lower costs. The companys US employees will be informed about the lay-offs as the drug maker begins to employ a big cost-saving program after its best-selling Advair asthma medication saw a sharp decline in sales amid increased competition. The reorganization changes were first unveiled by GlaxoSmithKline in October 2014.

Currently, GlaxoSmithKline has a global workforce of 99 000 people, with 17 000 being employed in its commercial and research business in the U.S. “Cuts are not being made across the board but are strategic, focused changes to allow GSK to operate more efficiently,” the companys spokesman said. “This is a rescaling of work to reflect market forces that were anticipated but that have accelerated and are affecting the entire industry.”

GlaxoSmithKline Plc lost 1.54% to trade at GBX1 466.5 per share by 13:00 GMT, marking a one year change of -7.91%. The company is valued at GBP72.44 billion. According to the Financial Times, the 23 analysts offering 12-month price targets for GlaxoSmithKline Plc have a median target of GBX1 530, with a high estimate of GBX1 758 and a low estimate of GBX1 250. The median estimate represents a 2.72% increase from the previous close of GBX1 489.5.