AstraZeneca PLC, the global pharmaceutical giant and the UK's second biggest drug company, informed that it planned to restructure itself by introducing downsizing program and reorganizing its global research and development operations. The main idea of the strategy, which is to substantially help the company, is to slash approximately 1,600 jobs in the next three years. But that is not the last of the new and surprising restructuring plan as the pharmaceutical company has also informed that it will move its headquarters from the UK capital to Cambridge. The job cuts will be mainly seen in the UK and US as the global drug giant seeks ways to increase returns from unprofitable experimental medicines.
Certainly, the announcement of 700 job cuts in the UK will hit Chancellor George Osborne who helped the suffering Anglo-Swedish pharmaceutical giant secure a £5 million government grant to expand the Alderley Park research and development center.
Restructuring at AstraZeneca
On the 18th of March, AstraZeneca PLC, which is run by CEO Pascal Soriot, informed about the company's restructuring plans aimed at convincing its investors to back the changes. Indeed, investors of the global drug giant are concerned over the revenues as the company needs to replace its profitable drugs with expiring patents with new money-making drug newness. But the latest restructuring strategy is one of more than a few that have been implemented since 2007 and analysts are not convinced that these plans are enough.
According to details announced on the 18th of March, AstraZeneca will get rid of as many as 1,600 positions in the next three years. As for the UK business, it will have to slash around 700 jobs as part of a modernization of the research operations.
But that is not all; it was informed that the Alderley Park would also go through some kind of revolution as its R&D operation would be moved to a new facility located in Cambridge. The revolutionary changes will be introduced in the research and development as AstraZeneca PLC is trying to merge and strengthen its operations in the sector. Therefore scientists of the global drug giant will be working in three R&D centers located in: Cambridge, the UK; Gaithersburg, the US; Molndal, Sweden. And even though the Alderley Park research center will lose its significance, the UK will continue to play the main role in decision-making processes of the company.
In addition, Anglo-Swedish pharmaceutical company will shut down its office in London and its headquarters will be shifted to the new research hub in Cambridge by 2016. The new strategy of AstraZeneca CEO Pascal Soriot, which was created after long months of consultations and talks with investors and analysts, will be presented to investors on the 21st of March.
Chancellor Osborne hit by cuts at AstraZeneca
Certainly, news on the jobs cut at AstraZeneca PLC will have an undeniably strong impact on Chancellor George Osborne who is to deliver a budget on the 20th of March. As the United Kingdom is still facing the threat of a triple-dip recession, information on the restructuring plans of the global drug giant and its plans of slashing around 700 jobs might be a big threat to the Chancellor.
It was Chancellor George Osborne who had a hand in the £5 million financial help granted to expand the Alderley Park into the so-called "R&D heart" and now the significance of the center is to be reduced. Therefore it is expected that the Chancellor will face many questions regarding the financial help granted to AstraZeneca PLC. And what is interesting is the fact that the Alderley Park's employees amount to slightly over 7 percent of his constituents. And this fact might be very worrisome...
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