10,000 face Glaxo's axe at Wellcome

Glaxo has signalled the start of its surgery on Wellcome with a general redundancy warning that could see 10,000 jobs cut at an estimated cost of pounds 800m. Richard Sykes, Glaxo chairman, previously hinted the axe would fall largely on the scientific side of the anti-Aids drug- maker, which it bought in a pounds 9bn hostile bid three months ago.

At the height of the battle, trustees of the Wellcome Trust, which clinched Glaxo's victory by pledging its 40 per cent stake to the bid, received letters containing unidentified chemicals purporting to come from Wellcome employees threatened with redundancy.

Although the terms are believed to be generous and voluntary, fears of compulsory lay-offs are running high. The 500 research scientists at the former Wellcome research and development centre at Beckenham in Kent have been told they face face imminent removal to Glaxo's new pounds 650m facility at Stevenage in Hertfordshire. City analysts believe that around 10,000 jobs could be at risk as Glaxo removes overlaps and slashes costs at the combined group, taking the eventual redundancy bill to over pounds 800m.

Paul Talbot, national officer of MSF, the main union involved, said yesterday that worries among the 1,600 staff at Beckenham had been heightened by management's denial of a 5 June memo warning that research would be moving to Hertfordshire "as rapidly as possible" - in months rather than years. "It really is a very, very difficult situation there at the moment and there is a great deal of concern at what's happening."

He added: "As far as we know, nobody has been sacked or made redundant, but clearly there is a great deal of concern about these moves."

A Glaxo Wellcome representative yesterday admitted that a memo had gone out to Beckenham staff, but claimed it did not represent official policy. The final decision was in the hands of the research and development task force, chaired by Jim Niedel, Glaxo's research and development director, she said.

"A decision hasn't been taken by the integration executive on the location of research and development in the merged company. A decision will be announced as soon as a conclusion has been reached."

She also confirmed that there had been a general warning of redundancy in early May. Both the old Glaxo and the former Wellcome separation terms are on offer, with volunteers being offered the most suitable, depending on age and length of service. She emphasised, however, that no personal redundancy notices had been issued.

Mr Talbot, however, raised questions about the legal status of the general warning, which had been sent out without the usual involvement of the Department of Employment and consultation with the unions.

The latest developments are the most significant among moves to integrate the two companies since the bid went unconditional in March. Glaxo Wellcome has already announced that the closure of Wellcome's old headquarters in London's Euston Road will take place in September. It has also said Wellcome's operations head office will move in with Glaxo, which is based at Stockley Park, near Heathrow Airport, while UK distribution operations will be combined at Crewe, a former Wellcome site. But decisions about the bigger operations have yet to be taken. In all, Wellcome employed close to 4,500 people in the UK, while Glaxo's payroll totalled nearly 11,000.