Sequenom Discloses 75 Layoffs as Part of Cost-Cutting Reorganization
San Diego-based Sequenom (NASDAQ: SQNM), which specializes in molecular diagnostics and genetic analysis, plans to lay off 75 employees, or nearly 13 percent of its workforce, as part of a cost-cutting plan, according to a regulatory filing today.
Most of the employees being terminated were notified today, although voluntary and involuntary layoffs began July 1. In a previous filing, the medical diagnostics company said it had 594 employees as of March 4.
When Sequenom reported its second-quarter financial results last month, the company incurred a larger-than-expected loss of $31 million (27 cents per share). The company attributed its unexpected losses to a delay in the collection of diagnostic segment revenues because of changes in billing codes made by the Centers for Medicare & Medicaid Services.
“We knew that these coding changes were scheduled to be implemented at the beginning of 2013, but didn’t expect these changes to slow or reduce payments to the degree we experienced this quarter, especially with government payers,” CEO Harry Hixson said on a conference call. He also indicated at that time that Sequenom planned to implement cost-cutting initiatives “to reduce our net operating loss as we work to improve reimbursement.”
The company reported revenues of $34.9 million for the three months that ended June 30, saying that was a 91 percent increase from the $18.3 million reported in the second quarter of 2012. Most of that revenue—$24.5 million—was generated by the company’s diagnostics business.
In the statement filed today, Sequenom said it expects to record about $1.2 million in severance-related expenses during the current quarter, and anticipates the layoffs will reduce the company’s compensation-related costs by about $10 million. Sequenom said it also expects to recognize additional expense reductions as a result of the reorganization.