The future of hundreds of jobs in Sussex is looking bleak after drugs giant GlaxoSmithKline warned profits will be hit this year by falling sales and tough competition from rivals.

In October GSK said 180 workers could be made redundant at its manufacturing plant in Southdown View Way in Worthing and a further 130 jobs could be shed at its factory on the Manor Royal industrial estate in Crawley.

The possible job losses came as the company said it wanted to cut costs by £700 million over the next three years to offset falling sales of diabetes treatment Avandia.

The company paid out £338 million in restructuring costs during the final quarter of 2007 under the cost-saving plans, although a spokeswoman declined to comment on how many total jobs could be cut among the group's 22,000 UK staff.

Last week the company also warned of heavier generic competition to products such as Wellbutrin and Coreg, which treat depression and hypertension.

The redundancies will not be formally announced until after consultations with employees.

A company spokesman said jobs could be moved and employees may be able to apply for other roles within the company.

Shares in GSK fell by about eight per cent after the pharmaceuticals giant said 2008 earnings would be hit by declining sales of Avandia. Last May, there were claims - strongly denied by GSK - that the drug increased the risk of heart attacks.

Chief executive Jean-Pierre Garnier said: "The decline in Avandia sales, together with increased generic competition in the USA, will adversely impact our earnings in 2008."

The fall in share price came despite 2007 pre-tax profits being ahead of forecasts at £7.8 billion.

The group saw US sales of Avandia slump 29 per cent to £780 million last year, with overall sales of the treatment falling a quarter to £1.2 billion.

The impact of generic rivals added to a three per cent fall in US pharmaceutical sales to £9.3 billion, while the pound's strength against the dollar left the overall group's revenues down two per cent to £22.7 billion.

Mr Garnier, who steps down in May, was keen to stress the company's strength, with 13 new products filed with regulators. These include cervical cancer treatment Cervarix and epilepsy drug Lamictal.

Vaccine sales meanwhile were up 20 per cent to £2 billion following a stronger US performance, while the company also praised its "resurgent"

consumer health care division.

Revenues at the business, which makes well-known brands such as Panadol pain reliever, Aquafresh toothpaste and energy drink Lucozade, advanced 14 per cent to almost £3.5 billion.

Mr Garnier added: "We remain confident in GSK's future. Our fast-growing vaccines business, the resurgence of our consumer health care division and the strong performance of many key pharmaceutical products are all providing contributions to growth."