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AstraZeneca to cut 7,300 jobs

AstraZeneca said the job cuts, which will cost .1bn to implement, would help it save .6bn a year by the end of 2014

Drugs company AstraZeneca has announced plans to cut another 7,300 jobs over the next two years.

The cuts come on top of 21,600 jobs axed since 2007. The company employs 61,000 people worldwide, with 8,000 on the payroll in the UK.

Up to a tenth of the 3,000 research and development workers at Astra’s Alderley Park site in Cheshire, which focuses on gastrointestinal and heart drugs, will be made redundant, according to unions, which said there would also be back office cuts at other UK sites.

Allan Black of the GMB union warned that axing research and development jobs would damage the economy. “These cutting-edge R&D jobs are both well paid and essential for a thriving UK economy,” he said.

The Unite union added: “This is a blow to Britain’s research and development base and Unite will be doing everything possible to minimise compulsory redundancies at Alderley Park.”

Astra said the job cuts, which will cost .1bn (£1.4bn) to implement, would help it save .6bn a year by the end of 2014.

Chief executive David Brennan warned that the company is facing a “challenging 2012 outlook”. “The company anticipates a constant-currency revenue decline for 2012 in the low double-digit range,” it said in the statement.

Astra’s pre-tax profits in the last three months of last year dropped to .05bn compared with .28bn a year earlier. Over the full year profits were up 13% to .4bn.

The Anglo-Swedish drugmaker faces loss of exclusivity on many of its top-selling drugs over the next five years and has few obvious replacements in its pipeline. The antipsychotic medicine Seroquel, its second-biggest drug, will lose exclusivity in the United States in March and goes off-patent in European countries this year.

Doubts about Astra’s future have grown since a double blow to its new drug pipeline in December when it scrapped an ovarian cancer drug and took a big writedown on an experimental antidepressant being developed with US pharmaceutical company Targacept.

“Disciplined execution of our strategy has delivered a good performance in 2011 in the face of intensified pricing pressure and generic competition. Our strong cash flow supported a significant increase in cash distributions to shareholders and continued investment to drive future growth and value,” Brennan said. “While the further expected losses of market exclusivity make for a challenging 2012 outlook, we remain committed to a long-term, focused, R&D-based strategy, and today we have announced further steps to drive productivity in all areas to improve returns on our investment in innovation.”

The company, which closed a site at Charnwood, near Loughborough, at the end of last year, said the latest restructuring was needed because of the weak economy and the impact of competition from generic drugs. Its other sites in the UK are in Macclesfield, Cambridge, Luton, Avlon near Bristol, Paddington in London, and Brixham in Devon.

Despite the challenges, Astra committed to returning cash to shareholders via a .5bn share buy-back this year, more than analysts had expected.

A year ago Astra’s US rival Pfizer announced it would shut down its plant in Sandwich, Kent, which developed the impotence drug Viagra, with the loss of 2,400 jobs, leaving an area of deprivation on the Kent coast with few remaining private sector jobs. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds