GSK to cut back office jobs to fund £400m Cambridge R&D campus

GSK is set to reduce headcount in its back office to help finance a £400m mega-campus in Cambridge, a move the company hopes will strengthen its drugs pipeline and mitigate an impending patent cliff.

New R&D Hub in Cambridge

In his first major strategy update as chief executive, Luke Miels unveiled plans for a new 300,000 square foot site in Cambridge. The facility will become the new home for GSK's research and development arm and host more than 1,000 scientists.

The group is expected to launch a sweeping round of layoffs to fund the investment and support the firm's operating margin.

Miels hailed the move, which will see GSK vacate its Stevenage R&D site by 2029, as a boost for the FTSE 100 giant. The company has lagged behind London-listed rival AstraZeneca and US peers in recent years.

"This investment will accelerate our R&D and help us deliver new, competitive products," Miels said. "It integrates GSK further into one of the world's leading centres of knowledge and demonstrates the attractiveness of the UK's life sciences ecosystem."

Improving Government Relations

The bumper investment is the latest sign of improving relations between ministers and the UK's pharmaceutical industry. At the start of this year, major players including AstraZeneca and German giant Merck cancelled expansion programmes worth billions of pounds in a dispute with the government over the NHS's pricing regime.

However, in February, former science minister Patrick Vallance struck a deal for the taxpayer to contribute an additional £1bn on drug prices. This prompted AstraZeneca to revive plans to invest £300m in the UK economy. The agreement also eased pressure from President Donald Trump, who had threatened to impose large tariffs on UK pharma exports unless the country increased its spending on drugs.

Ramping Up Late-Stage Trials

GSK's new campus marks the first major strategic announcement from new boss Miels, who took over from veteran chief executive Emma Walmsley at the end of last year. The FTSE 100 giant had struggled to keep pace with rivals, with shareholders concerned about an impending patent loss on one of its most lucrative drugs.

The patent on GSK's HIV dolutegravir franchise is set to expire from 2028, leaving the group facing a gap in its forward earnings. In its eagerly anticipated update on Tuesday, Miels unveiled a major investment drive in late-stage trials, focusing on programmes with the most growth potential. The London-listed firm will double its phase-three trials this year from 10 to 20, significantly ramping up its pipeline.

Job Cuts in Less Profitable Segments

To help fund the parallel investment programmes, the group has lined up plans for sweeping redundancy programmes in less profitable segments. The job losses are expected to come from back-office roles such as human resources, as well as shifting staff from general medicine arms to support faster-growing parts of the business.