Siemens Healthineers Shutters Fast Track Diagnostic Unit, Lays Off 90

Siemens Healthineers has announced its intent to close its fast track diagnostic unit, laying off around 90 employees.

The fast track diagnostic unit saw skyrocketing demand for polymerase chain reaction (PCR) testing products during the COVID-19 pandemic and has since seen a significant drop. The unit mainly provides PCR tests in Europe.

“At this time, the [fast track diagnostic] testing portfolio serves a limited number of customers — with revenue and growth opportunity notably reduced in the post-pandemic environment,” a Siemens spokesperson told MD+DI. “Given current marketplace factors, we had explored options for where to potentially invest further in the unit and sought interest from potential buyers for it. Following a thorough assessment of our broad portfolio of solutions, we concluded that we would prioritize our investment in innovation that presents greater benefit to our business, our customers, and their patients.”

The unit closure will reportedly effect about 90 employees, mostly based in Luxembourg. The company said it intended to shutter the unit by September of this year. Its decision to close the unit was a result of a “regular strategic review of portfolio contributions and market opportunity and is independent of the broader restructuring of our diagnostics business,” according to the spokesperson.

Siemens is currently in the midst of a wider, independent restructuring of its diagnostic business which last year saw 300 employees laid off in New Jersey in an effort to achieve €300 million in savings by 2025. When announcing its plan to restructure in 2022, the company cited external headwinds outweighing operational improvements as a reason behind the decision.

“At diagnostics we have come to the conclusion that the dramatically changed macroeconomic environment demands immediate and comprehensive measures," Bernd Montag, Siemens CEO, told investors at the time.

While not specifically mentioning a workforce reduction in its initial restructuring announcement, Reuters reported that the plan, according to sources within the company, would involve job cuts and shuttering some locations.

More recently, siemens executives highlighted, in a call to investors, that the restructuring had positively impacted revenue in the first quarter, and diagnostic sales grew 2% in Q1 when excluding sales of COVID-19 antigen tests.

“We had a good start to the new financial year with broad-based growth,” Montag said, in the February Q124 financial call. “The transformation of our diagnostics business is showing positive momentum.”

As for continued restructuring of its diagnostic business, the company spokesperson told MD+DI, “In the course of that still-ongoing broader restructuring, we unfortunately cannot rule out further closures or layoffs.”