Hematech, a Sioux Falls' flagship biotechnology research company, has laid off 18 people in response to the changing needs of its parent company, according to ArgusLeader.
Hematech research focuses on developing antibodies in cattle to treat human health conditions. The company once envisioned becoming a major manufacturer of the human antibodies, although its focus has switched to research.
The layoffs included researchers, technicians and support staff, according to Eddie Sullivan, Hematech chief operating officer.
Hematech still employs 28 people in Sioux Falls and another 11 at its research and development center in Sioux Center, Iowa, where it houses research animals.
At its peak, Hematech employed 56 people in Sioux Falls, Sullivan said. They worked in 28,000 square feet of laboratory space in the Sioux Falls Technology Park. Hematech will remain in the facility.
The layoffs became necessary as Hematech's parent company, Kyowa Hakko Kirin, headquartered in Japan, targeted specific areas on which it wants to focus antibody production in the near future: oncology, immunology and kidney disease. Hematech had more people on staff than KHK had projects, according to Sullivan.
The current layoffs are the only ones anticipated, Sullivan continued, and he said Hematech is in a position to grow again as KHK's research needs dictate.
"As our projects develop, our numbers will go up and down to meet the needs of the projects," he said.
Sullivan said research in biosciences and medical sciences has grown significantly in Sioux Falls in the past decade, and he hopes laid-off employees will be absorbed readily by other research initiatives in the city.
Evan Nolte, executive director of the Sioux Falls Area Chamber of Commerce, said the layoffs are "a significant development and a cause for concern."