Pacific Biosciences cuts 28% of its workforce
Wednesday, September 21, 2011
Pacific Biosciences of Menlo Park, CA is laying off 130 employees, or 28% of its total workforce, according to Xconomy.
The company explained that a slower-than-expected adoption rate for its sequencing machine has left it with more employees than it wants or needs. The workforce reduction “will allow the company to continue support of its growing customer base with improved service and continued product enhancements, while at the same time conserving cash,” PacBio said in the disclosure.
The company says it’s cutting workers across the organization, but that its operations and R&D wings will be most affected. PacBio expects to incur $5.2 million in restructuring charges as a result of the layoffs—mainly compensation and benefits to terminated employees. Hugh Martin, PacBio’s CEO, said in a statement that it has been “an extraordinarily difficult day” for the company given its tight-knit corporate culture. But he said the cuts were necessary to lower the company’s burn rate. Under its new structure, PacBio will have approximately $190 million in cash and investments by the end of the September (down from $217 million at the beginning of the third quarter).
Despite the successful introduction of its “RS” sequencer this spring, PacBio has taken a hammering in the public markets this year, especially after a disappointing earnings report in early August, which sparked a rout that halved the stock’s value. The company has a backlog of orders for the sequencers, which cost $700,000 each, but there are concerns that dwindling government research budgets will cut into demand for next-generation sequencing devices.