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Thermo Fisher Faces Layoffs Before Acquisition

Article-Thermo Fisher Faces Layoffs Before Acquisition

During the first half of the year, Thermo Fisher Scientific (Waltham, MA) laid off 655 employees, according to a federal filing. The layoffs, representing 1.7% of the company's total workforce, come as the company moves towards the purchase of Life Techonologies for $13.6 billion.

In its latest move, the company slashed 150 jobs in lab products and services, 110 jobs in specialty diagnostics and 80 jobs in analytic technologies. In total, these cuts led to $12.8 million in severance costs for the company, representing more than half of its $21.5 million restructuring changes disclosed in its last Q2.

After passing layoff language through its PR system, Thermo has dubbed the job cuts as "headcount reduction and facility consolidations."

The company expects to close on the Life Technologies deal by early 2014. Thermo believes that the acquisition will spur annual revenue growth of 30%.

The cost of the acquisition includes $2.2 billion to retire Life's existing debt. When Thermo first announced the acquisition in April of this year, many analysts wondered if the company had overpaid for Life Technologies. Over the last three years, Life has only managed to achieve averaged sales growth of 5%. Life falls behind Illumina in the world of gene sequencing. While Life's Ion Torrent platform has been a commercial success, many believe that Life will fall into second place as the market moves forward.

To make the acquisition happen, Thermo is still stringing together the financing it needs. So far, the company has raised $2.2 billion in a stock sale. The company will also use $10 billion in debt and cash and an additional $4 billion in equity financing to cover the acquisition.

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