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Genzyme workers, and for that matter state officials, will likely face a long wait before they find out which facilities and which workers will be cut, as part of an overall strategy to reduce headcount by 10 percent.
Genzyme officials say they have an undisclosed savings target that will be split in half between layoffs and other cost reductions, and that the target number of layoffs is 1,000 in the next 15 months. However, the actual facilities and jobs to be slashed have not yet been determined, company officials say. The company is expected to initiate layoffs gradually over the next 15 months, according to spokesman Bo Piela.
“Some of those decisions will be made this year, but most of them will be made next year,” Piela said. Global headcount for the Cambridge-based biotechnology company is 12,800, with about 5,000 in Massachusetts. Approximately 2,800 of the company’s employees belong to three businesses that Genzyme (Nasdaq: GENZ) is in the process of divesting. The first divestiture of the company’s genetic testing business is for $925 million in cash to Burlington, N.C.-based Laboratory Corporation of America Holdings. LabCorp agreed to offer jobs to Genzyme’s 1,900 employees. The company has received several bids for both its diagnostics business and its small pharmaceutical business, which will be a simple asset sale of a facility in Switzerland. Genzyme officials said, during investor presentations Wednesday, that it expected to complete those transactions by the end of the year.
The company has a total of 12 manufacturing facilities, including the two Massachusetts facilities in Allston and in Framingham. Piela said the company expected to hire between 500 and 600 workers between those two facilities by the end of 2011 but could not specify which type of jobs those would be, in comparison to the jobs that could be lost due to the restructuring. He also said he could not predict the net impact on the local workforce.
Genzyme workers have been told that manufacturing and quality control jobs throughout the company will be spared, according to a New Jersey employee who asked not to be named.
Chief Operating Officer David Meeker, speaking at the Stifel Nicolaus & Company Healthcare Conference in Boston Wednesday, said that there are likely to be two phases in the restructuring, and that manufacturing cuts could be possible in the second round of reductions.
“There’s more than enough to do on both the commercial side as well as the organizational side in the back room – we can fix that chunk first. So, I think as far as how we sort of bifurcate the business, the manufacturing quality will be, I would say, in the second phase [of the cuts]”, Meeker said.
Piela said that the idea of closing one of the company’s global facilities is not off the table.
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