GlaxoSmithKline has announced plans to cut up to 850 R&D jobs in the UK and USA, in a bid to improve efficiency.

The figure represents around 6% of its total R&D staff and the cuts are in addition to the 350 posts that GSK eliminated in June as part of a restructuring programme. The company said that the changes are necessary as part of its longer-term strategy "to ensure that we can invest in key areas of future growth and evolve our business to compete effectively in what is a rapidly changing and challenging environment for pharmaceutical companies."

The move fits in with GSK's announcement in July about the creation of new, smaller Drug Performance Units (DPUs) within its existing Centres of Excellence for Drug Discovery. individual DPUs will compete for a total of $1 billion per year in investment capital, to be allocated by a new global Drug Discovery Investment Board.

That board, which comprises senior GSK R&D leaders as well as external representatives of the venture capital and biotech/pharma investment sectors, will award capital to the DPUs based on performance and value-creation set against three-year business plans. In August, a GSK spokesperson told PharmaTimes that the new system “recognises success and ambitious risk-taking leading to innovation” and “teams will also be held accountable for failure and poor decisions”.

The job cuts at GSK and the shift in focus is representative of the changes affecting the pharmaceutical sector as a whole and Deutsche Bank analyst Barbara Ryan told Reuters that "what the industry now is focused on is reallocation of scarce resources in R&D". She added that "they have to behave like portfolio managers and identify the best opportunities for a finite pool of capital".