This story was originally published Oct. 26.
Illumina today disclosed that it plans to lay off 200 employees, or 8 percent of its global workforce, in a restructuring that it announced last week alongside its third-quarter financial results (IS 10/25/2011).
In a document filed with the US Securities Exchange Commission last week, Illumina said that the restructuring is intended "to better align the company’s organization and cost structure in consideration of uncertainties associated with academic and government research funding and the global economic environment."
The company said that the layoffs and subsequent cash expenditures should be completed this year and reiterated that the restructuring will incur costs of $15 million to $17 million.
CEO Jay Flatley said earlier in the week in a conference call to discuss the company's quarterly results that the restructuring will include "the creation of a new business unit that will be focused specifically on the clinical markets."
Flatley did not provide details on the new business unit, but said that it will develop products and provide services tailored to clinical customers and will help the company "take advantage of the impending growth of that market."
The layoffs are a reaction to falling revenues and profits for the company, which warned in mid-October that it would miss its third-quarter revenue projections due to uncertainty in the academic funding environment, a slower-than-expected uptake of the HiSeq 2000, and reduced reagent use for its sequencing instruments (IS 10/11/2011).
Illumina's third-quarter revenues fell 1 percent to $235.5 million from $237.3 million in the year-ago period while profit fell 43 percent to $20.2 million from $35.4 million in the third quarter of 2010.
The company's sequencing and microarray business were both "significantly impacted by uncertainty over research funding in Europe and the US," Christian Henry, the company's chief financial officer, said during the call.