Employees at Wellcome `kept in dark over jobs'

Wellcome was struggling yesterday for a coherent response to Glaxo's unexpected £9bn hostile bid as senior chemists at its research and development centre in Beckenham, south London, complained that management had made no attempt to calm fears of widespread job losses in the event of a takeover.

Confusion was also rampant in the City, where analysts were suggesting an enormous spread of potential cost savings from a merger of the two companies' operations. Estimates ranged from £400m a year to £1bn.

Dr Salvador Moncada, head of research and development at Beckenham, said: "We have not heard a word from anybody. You can imagine how uncertain the situation is here."

The 500 staff working under him were "annoyed and frustrated. It is difficult for people to be kept in the dark, especially further down the organisation where they have relatively low salaries and high mortgages."

Even the most modest estimates of cost savings suggest that £200m could be cut from Glaxo/ Wellcome's combined research and development spend of £1.3bn. The axe is expected to fall most heavily at Beckenham, with key staff retained to work at Glaxo's state-of-the-art £700m facility in Stevenage, Herts. A further £200m might be cut from sales, marketing and administration.

A spokesman for MSF, the largest staff union at both companies, was also critical of the companies' lack of communication with staff. "There has been no progress at all. We are trying to get in touch with both companies. Employees have not been brought up to date and are as much in the dark as ever."

Glaxo staff received an internal memorandum on Monday morning informing them of the deal, but apart from general comments on efficiences at the combined group it made no reference to possible redundancies.

One analyst said it was a fair bet that Glaxo had little idea how much might be saved. The uncertainty made it difficult to guage how full a price Glaxo's £10.25-a-share offer represented. It is estimated that cost savings of about £70m would be requiredto make the deal earnings-enhancing for Glaxo.

When SmithKline Beecham was formed six years ago, cost savings of £200m were made from a £4bn cost base without attacking the company's research and development spend.

The attraction of the offer to the Wellcome Trust, whose agreement to sell its remaining 39.5 per cent stake in Wellcome precipitated the bid, became apparent with estimates that the deal could add £170m a year to the amount it makes available for medical research.

Adding together the income from the cash element of Glaxo's offer with the dividends from the shares being offered, Wellcome's income from its stake would rise from just under £100m a year to £271m.

The Wellcome Trust would become one of Britain's biggest market investors following a takeover, with about £6.5bn under management.

A spokesman for the Association of the British Pharmaceutical Industry said the deal would give an enormous impetus to pharmaceutical research in Britain, which already accounts for a third of all industrial R&D in the UK. The drugs industry is Britain'ssecond-largest manufacturing exporter, employing 80,000 directly and 250,000 in related industries.

It emerged that advisers to Glaxo and the Wellcome Trust had been discussing a possible sale of the key 40 per cent stake for several weeks. The deal is still dependent on the trust securing High Court approval to reduce its stake below 25 per cent.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor
The ZX Spectrum has been crowd-funded back into play - with some 21st-century tweaks

The ZX Spectrum is back

The ZX Spectrum was the original - and for some players, still the best. David Crookes meets the fans who've kept the games' flames lit
Grace of Monaco film panned: even the screenwriter pours scorn on biopic starring Nicole Kidman

Even the screenwriter pours scorn on Grace of Monaco biopic

The critics had a field day after last year's premiere, but the savaging goes on
Menstrual Hygiene Day: The strange ideas people used to believe about periods

Menstrual Hygiene Day: The strange ideas people once had about periods

If one was missed, vomiting blood was seen as a viable alternative
The best work perks: From free travel cards to making dreams come true (really)

The quirks of work perks

From free travel cards to making dreams come true (really)
Is bridge the latest twee pastime to get hip?

Is bridge becoming hip?

The number of young players has trebled in the past year. Gillian Orr discovers if this old game has new tricks
Long author-lists on research papers are threatening the academic work system

The rise of 'hyperauthorship'

Now that academic papers are written by thousands (yes, thousands) of contributors, it's getting hard to tell workers from shirkers
The rise of Lego Clubs: How toys are helping children struggling with social interaction to build better relationships

The rise of Lego Clubs

How toys are helping children struggling with social interaction to build better relationships
5 best running glasses

On your marks: 5 best running glasses

Whether you’re pounding pavements, parks or hill passes, keep your eyes protected in all weathers
Joe Root: 'Ben Stokes gives everything – he’s rubbing off on us all'

'Ben Stokes gives everything – he’s rubbing off on us all'

Joe Root says the England dressing room is a happy place again – and Stokes is the catalyst
Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

Please save my husband

As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada