GlaxoSmithKline will be run directly from London for the first time since its creation in 2001 following the assumption of the chief executive’s role by Andrew Witty in May.

Mr Witty, formerly GSK’s president of European pharmaceuticals, will remain at the group’s Brentford office in his new role in what is a significant change of corporate structure. JP Garnier, the current chief, has been based at the company’s US headquarters in Philadelphia.

The US, where GSK employs 25,000 staff, generates roughly half of the annual sales of £20 billion.

A spokesman said Mr Witty will remain in the UK, partly for family reasons. He emphasised that there would be no significant relocation of staff or resources from Philadelphia to Britain. He added that Mr Witty would visit the US frequently and said that GSK would continue to operate a “dual headquarters” split between the two cities.

The Philadelphia office, which employs 2,800 people, will continue to oversee GSK’s global manufacturing operation, information technology, human resources as well as its consumer healthcare business that include brands such as the over-the-counter weight loss drug Alli.

London will continue to handle other functions, such as finance, legal and communications.

GSK’s decision to shift its focus reflects growing expectations that the US will be a less lucrative market for big medicine makers over the next few years because of increased industry regulation. Big drug companies are likely to expand in other regions, such as Asia-Pacific.

Mr Witty, who joined Glaxo UK in 1985, is taking over at a tough time for one of the UK’s biggest businesses, which is worth about £76 billion. Despite annual sales of £20 billion and one of the strongest drug pipelines in the industry, GSK has struggled to deal with a collapse in sales of Avandia, its diabetes medicine and second-biggest selling product. Last year, the drug was linked to a significantly increased risk of heart attack.

Mr Witty is also taking up the reins in the midst of a £1.5 billion cost-cutting drive that includes plans to remove at least 5,000 jobs from a total workforce of 102,000, shut some of its 99 sites and outsource the manufacture of some drugs.

His appointment also led to the departure of a rival candidate for the top job, operations chief David Stout, who is set to leave next month.

Chris Viehbacher, president of Glaxo’s US pharmaceuticals business, who also failed in the race to replace Dr Garnier, is set to stay and join the group’s board as an executive director.

In an attempt to counter their disappointment and stop them leaving, both Mr Stout and Mr Viehbacher were offered £2 million – mainly in shares to be paid over the next three years, as well as places on the board.

Burroughs Wellcome & Company, one of the constituent companies that later became GSK, was originally founded in London in 1880 while John Smith, which later became SmithKline, was established as a pharmacy in Philadelphia in 1830.

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