GlaxoSmithKline Pharma (GSK) has given severance packages to 25 out of the 50 management staff members of the Burroughs Wellcome plant who did not qualify for the Voluntary Retirement Scheme (VRS) announced by the GSK board in June 2003 for its 510 workmen. The company officials did not reveal the exact amount of the separation package, saying the valuation of the package has been done on a case-to-case basis depending on criteria like number of years of service left, and seniority of the members. The current package is only for 25 members selected out of 50 management staff members.

"The package has been generous and fair with all 25 members responding positively to the offer. In near future, the board will decide over the fate of the remaining 25 staff members," said an official spokesperson of the company. The successful VRS package to its workforce in July has paved way for the merger of GSK India and Burroughs Wellcome. According to GSK spokesperson it will take some more time for the merger process of GSK and Burroughs Wellcome to be through. Legal merger will follow official merger.

Though a global merger between Glaxo and Wellcome was implemented across the world in the mid- and late-1990s, in India it got into a quandary over wage differentials. Payscales of workmen at Burrough's Mulund factory have been historically higher than what GSK offers at its own factories. While business and operational integration was completed in the late-1990s, Mulund employees did not settle for lower wages and refused a one-time package that would make up for the difference, effectively blocking a merger. In February this year, the Burroughs management informed the Mulund employees that the plant was becoming unviable to run.

In its cost cutting and restructuring bid, GSK has resorted to closing down of its two units at Mumbai and one in Bangalore by way of offering severance packages to surplus workforce. The company now sources much of its requirements from contract manufacturers.

GSK's Betnesol range of eye and ear drops, Vitamin C brand, Celin and calcium supplement Ostocalcium has been shifted from Mulund to GSK's facility in Nashik. The Mulund facility is spread over 10 acres of land in an area that has recently seen many factories replaced by residential or retail complexes. It has two manufacturing plants, one for chemicals which was shut some years ago, and one for pharmaceuticals which is operational.