THE North-East economy was dealt another savage blow last night as GlaxoSmithKline (GSK) announced it was planning to axe 400 workers in the region.

The jobs are to go at the pharmaceutical company's Barnard Castle plant in County Durham over the next three years, as part of a total UK cutback of more than 1,000 workers.

The entire Barnard Castle workforce of 1,500 was told of the job losses during two meetings at the Harmire Road plant yesterday, before the announcement was made at the London Stock Exchange.

GSK has blamed the cuts on the huge merger, completed last year, between Glaxo Wellcome and SmithKline Beecham, from which the global drug giant expects to save £1.6bn by 2003.

The Barnard Castle factory, which opened more than half a century ago, is one of the biggest pharmaecuticals plants in the world.

Drugs produced there are exported to more than 100 countries.

The latest announcement comes as yet another setback to a part of the North-East already reeling from the foot-and-mouth crisis.

Analysts warned that the 400 job losses will have a wide impact on the economy of Teesdale where Glaxo is by far the largest employer.

Local MP Derek Foster said: "The fallout from this will be a massive blow to the whole of South Durham.

"Foot-and-mouth has already brought the area to its knees. Teesdale's other big employers, agriculture and tourism, have been devastated. People looked to GSK for reassurance."

Mr Foster will be meeting GSK officials later today when he will hear when and where the axe will fall.

He urged Trade Secretary Patricia Hewitt to set up a task force to help people find new jobs.

GSK's move is just the latest in a long line of workforce cuts at some of the region's biggest employers.

Earlier this year, more than 1,000 steelworkers at Corus, in Teesside, were made redundant. More recently, troubled shipbuilder Cammell Laird was also forced to make cuts at its North-East shipyards.

And 600 workers at the Rothmans factory, in Darlington, face an uncertain future if tough new European anti-smoking laws mean work is shifted abroad.

Speculation about possible cuts at Barnard Castle, which is one of GSK's biggest sites worldwide, have been circulating in Teesdale since the merger.

Many workers feared their jobs could be duplicated at other plants in the UK and abroad, and would therefore no longer be deemed cost effective by the company.

The announcement has sent shock waves through the community.

Few families will be left unaffected by the job cuts, and workers at the plant were still in the dark about who would be forced out.

Ken Coates, an engineering technician at the Barnard Castle plant, and member of Teesdale District Council, said no one's job was safe.

"I'm probably facing voluntary redundancy, but I've been there 30 years and nearing retirement age, so its not so bad for me," he said. "But I feel for those with a family and a home, this will be a massive blow to them, and a massive blow to Teesdale, which relies on Glaxo completely."

Union representatives claimed yesterday that the cuts could be the start of the gradual erosion of the plant's workforce.

Roger Jeary, of the Manufacturing Science and Finance Union, said: "This is an inevitable consequence of the merger which we predicted three years ago.

"We fear this is only the beginning."

GSK yesterday stressed that the company would reduce the effect of job losses by phasing them over three years, and also through retraining, voluntary redundancy and early retirement. Site director John Teward said: "We deeply regret the proposed job losses, and we are committed to do all we can to support anyone affected by this proposal."

One NorthEast has vowed to encourage industries to locate to Teesdale, and the regional development agency promised last night that those forced out by the cuts would receive support.

Jonathan Blackie, director of strategy and external affairs at One NorthEast, said: "We are totally shocked at these cuts, and feel deeply for those who may face forced redundancy.

"We will continue to work with Glaxo to secure its presence in Teesdale, and we will do everything we can to help promote industry in the area.

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