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ABI Lays Off 500 Workers

SAN FRANCISCO, Dec. 27 - Applied Biosystems said today that it was laying off approximately 500 people, almost 10 percent of its workforce.


The layoffs of about 400 regular positions and 100 contract and temporary positions affect all levels of the company, an ABI spokesperson told GenomeWeb, including people in research, sales, marketing, and manufacturing. The layoffs are effective January 1 and include people working throughout ABI's offices in the USand Europe.


Jobs are being eliminated to gird for uncertain economic conditions, said the spokesperson. Additionally, the current workforce is being reduced as R&D investment is dropped from approximately 14 percent of sales which was part of a research initiative begun in July 2001 to more historical levels of 11 percent, said ABI.


As a result of the layoffs, ABI will take a special charge of about $40 million in the second quarter of 2003, the company said. The charge will include the cost of severance packages and office closures.


The company began notifying employees today about the layoffs, and would continue to inform people over the next several days, the spokesperson said.


"Today's cost reduction actions should enable us to better manage through an uncertain environment," Michael Hunkapiller, president of ABI, said in a statement. "We expect the life sciences research market to continue to grow. However, present challenges include delays in appropriations for the National Institutes of Health for the current federal government fiscal year, and uncertainty about funding levels in Japan, parts of Europeand within the pharmaceutical industry. These challenges and uncertainties have prompted us to rebalance our expense levels and take a careful look at costs throughout the organization."


"Overall, costs are expected to grow more modestly, and eliminating certain expenses should allow us to embark on new, higher-value programs," Hunkapiller added. Those programs include resequencing and very high throughput genotyping and gene expression products and services, said Hunkapiller.