GSK yesterday unveiled plans to cut billions in costs as it embraces AI, raising fears for UK jobs.
The FTSE 100 drugs giant announced it would be closing its research and development site in Stevenage and moving its staff to a 300,000 sq ft facility in Cambridge, next door to its main UK rival AstraZeneca.
The move to the heart of Britain’s life sciences industry was welcomed by Prime Minister Andy Burnham, who said the £400million investment in the new facility was ‘a vote of confidence in British business’.
GSK also said it would upgrade its R&D facilities in the town of Ware, around 11 miles from Stevenage, and relocate some of its staff there alongside the Cambridge move.
‘We’re putting our money where our mouth is on this one,’ said GSK chief executive Luke Miels.
Restructuring: GSK, led by boss Luke Miels, pictured, said it will be closing down its R&D site in Stevenage, Hertfordshire, and moving its staff to a new facility in Cambridge
But the move raises doubts around the future of the 1,800 staff employed at GSK’s Stevenage site as it announced the relocation alongside plans for massive cost cuts.
In an update on the company’s strategy alongside its half-year results, Miels said GSK aimed to save £1.9billion a year by 2029 through the ‘reallocation’ of spending, which would help fund ‘large clinical studies as well as these new labs’.
The pharmaceuticals company declined to provide details on what the cuts would mean for its headcount.
But any job losses are expected to come mostly from areas such as GSK’s procurement arm, as well as parts of the company dealing with legacy drugs that are no longer patented and therefore less valuable to the business.
It also said cost savings would be helped by ‘technology and AI’, which Miels said would be used to process ‘massive’ amounts of data to help with drug research.
He added: ‘AI tools are going to need human stewardship, but what they are going to do is make our people more effective.’
On Monday, AstraZeneca boss Pascal Soriot said that fears of AI ‘killing jobs’ were ‘a bit of a fake story’.
GSK reported a 5 per cent rise in sales to £16billion for the first half of the year.
Profits in the period fell 31 per cent to £2.8billion, mostly because of a £1.3billion hit after GSK halted development of camlipixant, a treatment for chronic cough, following disappointing results from a clinical trial.
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GSK set to slash billions in costs over next three years by embracing AI sparking fears of a jobs bloodbath