San Diego’s Illumina cuts 5% of its global workforce
San Diego’s Illumina said this week it would cut its global workforce by 5% amid economic headwinds that have slowed orders and are expected to persist through 2023.
The market leader in genetic sequencing, which employs around 9,200 people worldwide, declined to say how many layoffs have taken place in San Diego – the largest of its main sites. A spokesperson said job cuts were happening around the world, but declined to say where and which departments were most affected.
Illumina confirmed that it filed a Worker Adjustment and Retraining Notification, or WARN, document regarding the layoffs, but the company declined to say how many workers were laid off in San Diego or California. The Union-Tribune has contacted state and local employment officials, but so far they have not addressed Illumina’s WARN Act notices.
Illumina is one of a string of tech companies that have laid off workers due to economic turmoil from inflation, global conflicts and currency exchanges. Facebook, Twitter and Amazon are among the big companies that have reportedly laid off thousands of workers. In San Diego, Qualcomm announced a hiring freeze earlier this month after adding more than thousands of employees coming out of the pandemic.
“Over the past few months, the macroeconomic environment has continued to become more challenging, affecting our customers and our business, and we expect these conditions to continue into 2023,” the company said in a statement. “While we are confident in Illumina’s long-term growth trajectory, we need to reduce the rate of growth in our expenses as we navigate these challenges.”
In a filing with U.S. securities regulators, Illumina said it will take a restructuring charge in the fourth quarter, which will include costs related to “optimizing our facilities.”
Illumina posted $4.5 billion in revenue last year and employs 5,650 full-time workers in the Americas, 2,240 in Asia and 1,250 in Europe, according to its Corporate Social Responsibility report. . It has facilities in San Diego, the Bay Area, and Wisconsin, as well as Singapore, China, the Netherlands, and the United Kingdom, among others.
“We understand the impact of these decisions on the affected employees and their families, and we are committed to supporting these employees in their transitions and to treating them with respect and compassion,” according to the company.
Illumina reported strong revenue for its fiscal third quarter, in line with Wall Street analysts’ expectations. But it also took a $4 billion write-down related to its acquisition of cancer diagnostics company Grail – a deal that antitrust regulators in Europe and the United States are trying to derail. Illumina is fighting regulatory pressure to untie the Grail deal in court.
Illumina also lowered its financial guidance for the remainder of this year. Some of its research clients in the United States and Europe are delaying projects due to poor economic conditions. Additionally, the demand for COVID monitoring has slowed.
Finally, some customers are postponing the purchase of new gene sequencing equipment until Illumina begins shipping its next-generation equipment – the NovaSeq X line.
NovaSeq X is expected to reduce the cost of sequencing a whole human genome to around $200, from around $600 today. The NovaSeq X is expected to begin shipping in the first quarter of 2023. Illumina received approximately 50 orders for the NovaSeq X line at the end of the third quarter, with an additional 170 customers in advanced talks, according to RW Baird, an investment firm of Wall Street.
Illumina shares traded up 1.7% to $238.49 on the Nasdaq stock exchange on Tuesday.