NEW YORK (GenomeWeb News) – Laboratory Corporation of America plans to eliminate 169 jobs at Genzyme Genetics' facility in Westborough, Mass., during the next year, according to a memo sent to employees.
In the memo — which was sent last week ahead of today's announcement by LabCorp that it posted a 15 percent increase year over year in first quarter sales — LabCorp said that layoffs will happen in four phases and affect Genzyme Genetics' reimbursement team and information technology team.
The job cuts were first reported by the Worcester Business Journal.
The layoffs come a little more than four months after LabCorp purchased Genzyme Genetics for $925 million. In the memo signed by Jon Hart, senior vice president and general manager for Genzyme Genetics, LabCorp said that the layoffs are "not a negative reflection on quality or support of clients, patients, or fellow employees. … The decision to reduce redundant support was a business decision based upon the overall capabilities of the combined group, and the resulting efficiencies and cost synergies."
The first layoffs will hit Genzyme Genetics' IT team, which will be merged into the LabCorp IT Group. The transition will occur starting next month and will be completed in September. The first phase of the integration of the two teams will end on May 20, at which time 12 positions will be eliminated. The second phase will be completed on Sept. 16, at which time 16 jobs will be eliminated.
The Genzyme Genetics Reimbursement Team will be transitioned into the LabCorp Billing Group in North Carolina starting in July. By July 29, the first phase of the process will end and 53 jobs will be eliminated. The second phase will be finished on Feb. 29, 2012, resulting in the loss of about 93 jobs.
LabCorp said that employee support programs will be provided during the transition.
Today, the Burlington, NC-based clinical laboratory firm reported that its first quarter revenues rose to $1.37 billion from $1.19 billion, while profits declined 4 percent to $127.1 million, or $1.23 per share, from $132.7 million, $1.25 per share, from a year ago.
On an adjusted basis, EPS for the quarter was $1.52, compared to $1.40 a year ago.
LabCorp said it recorded restructuring and other special charges of $27.9 million during the quarter, which included $4 million in severance and other personnel costs and a $9.8 million facility-related cost associated with the integration of Genyzme Genetics.
LabCorp also took a $14.8 million write-off on an investment made in a prior year.
The charges were offset by a restructuring credit of $700,000 from the reversal of unused severance and facility closure liabilities, it said.
Earlier this month, LabCorp announced a deal to buy Orchid Cellmark for $85.4 million.