Shake-up at AstraZeneca sees drugs giant slash 700 UK jobs

Chancellor's constituency is hit as company closes R&D facility in Cheshire

AstraZeneca is cutting 700 jobs in the UK, most of them in George Osborne's Tatton constituency, as part of a global restructuring that will result in a total of about 1,600 redundancies.

In a move that angered unions and caused embarrassment for the Chancellor ahead of tomorrow's Budget, the pharmaceuticals group announced it would close its research and development operation at Alderley Park, Cheshire. About 500 jobs will be lost there over the next three years, and a further 1,600 positions will move to a new research and development centre in Cambridge. A further 150 UK jobs will be lost outside Alderley Park in the restructure, bringing total UK redundancies to more than 10 per cent of the company's existing workforce of 6,700 in Britain spread over eight sites. Some 700 non-R&D jobs will remain at Alderley Park. Another 650 jobs will go in the US.

The shake-up will prompt a $1.4bn (£930m) charge and also see AstraZeneca's headquarters move from London to Cambridge.

AstraZeneca sought to soothe its staff by announcing a £330m investment in its new R&D site in Cambridge, but unions still reacted angrily.

Unite's national officer Linda McCulloch said: "Staff will be shell-shocked by this announcement. AstraZeneca's decision to relocate over a thousand jobs to Cambridge is a massive blow for the North-west. The region desperately needs this highly skilled workforce – they make a huge contribution to the economy and to the community."

The GMB's national officer Allan Black added: "This is disastrous news for the UK, and the North-west in particular."

AstraZeneca's chief executive Pascal Soriot put a positive spin on the announcement, saying: "The changes we are proposing represent an exciting and important opportunity to put science at the heart of everything we do because our long-term success depends on improving R&D productivity and achieving scientific leadership."

Drugs that account for more than 40 per cent of AstraZeneca's sales, such as ulcer and heartburn treatment Nexium, will lose their patent protection by the end of next year. Furthermore, the patent losses will continue beyond next year, with the group's best-selling drug, Crestor, used to combat cholesterol, set to lose its US patent protection in 2016.

This will open some of AstraZeneca's biggest-selling drugs to competition from low-cost rivals and prompted the group to warn in January that its sales and profits would fall sharply this year. Mr Soriot, who took over the chief executive's reins from David Brennan last year after a series of drug-development setbacks, said at the time that internal R&D, rather than takeovers, were the key to growth.

In October, AstraZeneca suspended its share buyback programme to give it more money to invest in the business. Mr Soriot acknowledged the difficulties his restructuring plan would cause in the UK and pledged to make the process as smooth as possible.

"I recognise our plans will have a significant impact on many of our people at our sites in Cheshire and London and the surrounding communities. We are committed to treating all our employees with respect and fairness as we navigate this period of change," he said.

The restructuring will focus AstraZeneca's research in three centres: Gaithersburg, Maryland in the US, Molndal in Sweden and Cambridge.