Illumina’s Contrasting Announcements Send Mixed Messages

Sending what some would say are rather conflicting messages, Illumina this week announced both a layoff of 151 San Diego, CA employees and the opening of a new solutions center in Bengarluru, India. The layoffs come as the company tries to cut $100 million in costs for 2023 amid biotech funding woes, inner-company turmoil, and a slashed annual profit forecast.

This round of cuts, which took effect Aug. 14, impacted employees at its University City Headquarters and 4795 Executive Drive site and affected technical positions in manufacturing and engineering as well as talent acquisition, according to the company’s WARN notice. Illumina will continue to pay and provide benefits for laid off employees through Sept. 11.

The company has made multiple cuts to its California workforce in the past 12 months, including two San Diego layoffs. In November, the company cut its global headcount by 5%, including 207 San Diego jobs.

During that time, the company faced the resignation of its longtime CEO, Francis deSouza, following a proxy fight with activist investor Carl Icahn, who disagreed with leadership’s decision to continue its $7.1 billion acquisition with Grail despite the US Federal Trade Commission and Europe’s top antitrust regulator rejecting the deal as anti-competitive. The European Union also announced in July that they were fining the company a record $476 million for gun-jumping the deal. The company is currently fighting the regulator’s order to divest Grail and expects rulings by early next year at the latest. Additionally, Illumina disclosed only last week that the SEC has initiated a new investigation into the deal.

As part of the $100 million cost saving plan put in place to face headwinds, an 8-K filing the company submitted to the SEC in June said that more cuts would be coming in Q323 and it was planning to scale back its real estate footprint.

Illumina framed the reductions “as part of a multiyear plan to realign its operating expenses while maintaining focus on its innovation roadmap and sustainable long-term growth,” according to the 8-K filing.

With that in mind, one would count MD+DI as surprised when Illumina yesterday announced the opening of a new office and solutions center in India.

The expansion builds on 16 years of collaboration with Premas Life Sciences, offering a permanent facility to continue working with the company, according to Illumina. The center features a fully equipped laboratory with the latest NGS and array technologies, is fully resourced with field applications, and offers company partners and customers broad genomic capabilities, according to the press release announcing the opening. Additionally, the solutions center will provide training and education to “increase local technical expertise and access to genomics.”

"In our 25th anniversary year, it's a very exciting time to be growing our physical presence in India to drive access and the further adoption of genomics to transform human health, particularly in oncology and infectious disease,” said Gretchen Weightman, Illumina senior vice president of Asia Pacific, Middle East, and Africa.

Now, will the company stick to its plan of continued layoffs in Q223? And has the second part of the plan — to scale back real estate holdings — been axed?