GlaxoSmithKline revealed plans to restructure its European operations as part of an ongoing effort to save at least $1.6 billion (£1 billion) by 2016.

The restructuring expands a program the company first announced in the second quarter of 2012. The new details of the impact on GSK’s European operation come as the company’s earnings fell 3 percent in the fourth quarter of 2012 to $10.75 billion (£6.8 billion).

“Given the sustained shift we have witnessed in the European reimbursement and pricing environment, we plan to initiate further restructuring of our European pharmaceuticals business to reduce costs, improve efficiencies, and reallocate resources to support identified growth opportunities in these markets,” says Andrew Witty, GSK’s chief executive.

The company’s decision was driven by a 7 percent decline in 2012 sales, evidence it says of “negative” pricing increases and a difficult environment. To compensate, the company will trim an undisclosed number of jobs across its European operations, it says, and will seek new opportunities to boost its earnings in the European Union including new partnerships.

“I think there is very little evidence to support the view, which says that healthcare budgets are going to grow significantly in Europe in the next five to 10 years,” Witty said during an investor call reviewing the company’s fourth quarter 2012 earnings report. “I just can’t see how you get there from the macroeconomic situation.”

In addition to staffing cuts, Witty says the company has initiated a review of strategic options for its energy and sports drink products Lucozade and Ribena, brands primarily marketed in established western markets.

Looking ahead to the remainder of 2013, GSK says it expects a year of improving but uneven sales performance. The company has 15 new drugs in its pipeline and expects to report late-stage data on 14 of those assets in 2013 and 2014.