Despite a string of new customer announcements during the second half of 2001, DoubleTwist fired 40 staff members last week in a drastic cost-cutting move, leaving the company’s staff — in the neighborhood of 200 people less than a year ago — at around 60.
John Couch has relinquished his role as CEO, a position he’s held since 1997, but will retain his position as chairman of the company’s board of directors. Robert Williamson, formerly president and COO, has been named president and CEO and a member of the board of directors.
DoubleTwist has been cutting back on costs since its first round of layoffs and the withdrawal of its IPO in March. The company eliminated free access to its doubletwist.com portal in November, saying at the time that the service was too expensive to maintain.
But while forced to abandon its hopes for a proposed offering of more than $80 million last year, DoubleTwist denied that it’s running out of cash.
The company “is on track to achieve cash positive operations this year,” Williamson told Bio-Inform via e-mail. A spokeswoman for the company said that DoubleTwist has also secured additional funds from its current investors.
The company declined to provide further details on its current cash position, however.
Williamson said that the scale-down was “a result of achieving marked improvements in operations…We felt that the structure of the management team should reflect this as well and that we only needed one senior executive, as opposed to both a CEO and president.” Williamson said it was Couch’s decision to hand over the executive management reins.
Couch was not available for comment.
Additional management changes include Simon Tomlinson’s promotion to vice president of worldwide sales from vice president of European sales and Gregory Thayer’s appointment to CFO and general counsel from vice president of corporate development and general counsel.
Williamson did not provide an organizational breakdown of the layoffs, but explained that the introduction of the company’s GenomeZone online product eliminated the need for a good part of the company’s engineering staff. GenomeZone “requires less DoubleTwist development, support, and maintenance resources than our previous online offering,” he said. “Therefore, we were able to reduce the staff needed to support our ongoing operations.”
Since reinventing itself as DoubleTwist at the height of the dotcom boom in late 1999, the former Pangea Systems has drawn some criticism from the bioinformatics community for putting a hip, new-economy image ahead of science. But it appeared that the company was gaining some respect during 2001: Its client base grewsteadily, its AGAVE XML-based annotation markup language was gaining acceptance, and it recently extended an important distribution deal with Hitachi.
Several new customers have also signed on recently, including a “major US pharmaceutical company” for its Clustering and Alignment Tools and Elan Pharmaceuticals for GenomeZone.
Said Williamson, “We are achieving a great level of market penetration for all of our products, and our revenues are commensurate with that sales traction.” But, he added, “Like any responsible company we evaluate our cost structure on an ongoing basis to determine ways to improve our economic position — every company I talk to has costs on their mind in this economic environment.”
Williamson said he’s confident that this last restructuring effort will keep the company afloat. “With the measures we have put in place, and with the continued support we are receiving from our investors, we are well positioned to remain a leading competitor in the market for high quality genomic data and bioinformatics tools,” he said.