San Diego’s Illumina cuts 5% of global workforce amid economic headwinds
Gene sequencing giant expects tough market conditions to linger into 2023 as cautious customers battle inflation.
San Diego’s Illumina said this week that it will trim its global workforce by 5% amid economic headwinds that have slowed orders and are expected to linger into 2023.
The gene sequencing market leader, which employs about 9,200 workers worldwide, declined to say how many layoffs occurred in San Diego — the largest of its major locations. A spokesperson said job cuts were occurring globally but declined to say where or which departments were most affected.
Illumina confirmed that it filed Worker Adjustment and Retraining Notification, or WARN, paperwork regarding the layoffs, but the company declined to say how many workers were let go in San Diego or in California. The Union-Tribune contacted state and local employment officials, but so far they have not processed WARN Act notices from Illumina.
Illumina is among a series of tech companies that have been shedding workers because of economic turbulence from inflation, global conflicts and foreign exchange rates. Facebook, Twitter and Amazon are among large companies that are reportedly laying 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 several months, the macroeconomic environment has continued to get more challenging, impacting 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 growth rate of our spend 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 linked to “optimization of our facilities.”
Illumina booked $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 other locations.
“We understand the impact these decisions have on the affected employees and their families, and we are committed to providing support to these employees in their transitions and treating them with respect and compassion,” according to the company.
Illumina reported solid revenue for its fiscal third quarter in line with Wall Street analysts’ expectations. But it also took a $4-billion goodwill write-down related to its acquisition of cancer diagnostic outfit Grail — a deal which antitrust regulators in Europe and the U.S. are trying to derail. Illumina is fighting the regulatory push to unwind the Grail deal in court.
Illumina also lowered its financial forecast for the rest of this year. Some of its research customers in the U.S. and Europe are delaying projects because of poor economic conditions. In addition, COVID surveillance demand has slowed.
Finally, some customers are putting off buying new gene sequencing equipment until Illumina begins shipping its next-generation gear — the NovaSeq X line.
NovaSeq X is expected to lower the cost of sequencing an entire human genome to around $200, compared with about $600 today. The NovaSeq X is expected to begin shipping in the first quarter of 2023. Illumina has received about 50 orders for the NovaSeq X line as of the end of the third quarter, with an additional 170 customers in advanced talks, according to R.W. Baird, a Wall Street investment firm.
Illumina’s shares ended trading Tuesday up 1.7% at $238.49 on the Nasdaq exchange.