Dive Brief:

• Danaher’s Cepheid plans to lay off 167 people who work at sites across California, according to a Worker Adjustment and Retraining Notification filed with the state in March.
• The layoffs, which Cepheid expects to complete by May 12, affect people who work at or report to 14 sites. Buildings at Cepheid’s headquarters in Sunnyvale, California, account for more than half of the affected locations.
• Cepheid laid off more than 1,300 people in California in 2023 and 2024. Danaher, which acquired Cepheid in 2016 for about $4 billion, forecast respiratory sales of $1.7 billion this year, down from almost $2 billion in 2024. Still, the company expects other parts of the business to grow.

Dive Insight:

Cepheid drove fast growth at Danaher’s diagnostics group during the COVID-19 pandemic. Diagnostic sales jumped from $6.56 billion in 2019 to $10.85 billion in 2022. Sales slipped in 2023 but returned to growth last year, sending diagnostic revenue up to $9.79 billion.

Danaher expects Cepheid’s respiratory sales to fall by almost $300 million this year to a rate of $1.7 billion, which CFO Matt McGrew said the company had always viewed as normal for a typical respiratory season in an endemic state.

McGrew told investors on an earnings call in January that in the previous two years, when Cepheid’s respiratory sales were $2 billion, the company saw “a big spike in September, October as people ... return to school and then return to work” and another spike in January and February. “We didn't really see that this year,” McGrew said. 

The trends informed Danaher’s conclusion that respiratory sales will settle at a post-pandemic normal of around $1.7 billion. Cepheid grew other parts of the business as respiratory sales fell and flatlined after the pandemic peak, culminating in its core non-respiratory reagent portfolio growing in the mid-teens in the fourth quarter.

Danaher CEO Rainer Blair told analysts at a TD Cowen event last month that he expects “double-digit plus growth out of the core portfolio in '25 and for the long term.” The forecast is based on Cepheid’s installed base, which Blair said the company has grown by more than three times since the pandemic, and on the expansion of its menu of diagnostic tests. 

The move to lay off 167 people follows waves of job cuts in 2023 and 2024. Cepheid laid off 686 people in California in April 2023 and ended the year by disclosing the elimination of a further 92 positions in the state. The company then disclosed plans to lay off more than 600 employees last year.