NEW YORK (GenomeWeb News) – Life Technologies has cut 75 positions at Applied Biosystems' facilities in Foster City, Calif., and will cut a further 40 employees in the summer, according to a notice posted on the website of California's Employment Development Department.
The first group of cuts occurred in January, according to the website. Such job cuts are not unexpected in the wake of the roughly $5 billion merger of Invitrogen and ABI to form Life Technologies. Invitrogen said in October that it expects $80 million in synergies, mostly from cost savings, in the first year after closing the deal.
"The company stated that part of those synergies would be achieved through corporate overhead reductions, which unfortunately does include the elimination of redundant positions between the two legacy companies," the firm said in a statement e-mailed today to GenomeWeb Daily News. "Life Technologies cannot confirm the number or timing of those workforce reductions," it added.
The firm has already closed ABI's corporate offices in Norwalk, Conn., as part of efforts to eliminate redundant operations.
Life Technologies currently employs around 9,500 people worldwide.
In a research note to investors today, Leerink Swann analyst Isaac Ro said he believes Life Technologies' goal of reducing annual costs by $80 million by the end of 2009 is conservative. He noted that an initial $50 million in reductions thus far was achieved through "improved purchasing processes and headcount reductions."
Ro, who currently has an "outperform" rating on Life Technologies' stock, believes the firm will be a primary beneficiary among the life science tool providers of increased NIH funding. He noted that Life Technologies' management "has identified 20 percent of total sales as directly exposed to NIH funds, but we note that over 50 percent of sales are driven by academic/government labs."