Illumina has laid off about 12% of its global workforce in roughly the past year and will pursue additional areas for cost savings as it turns its focus to improving margins and driving revenue growth, CEO Jacob Thaysen said on an earnings call.
The DNA sequencing market leader is coming off two years of steep losses accumulated in the wake of its $8 billion deal to buy cancer test maker Grail, an acquisition that triggered legal battles with antitrust regulators and activist investor Carl Icahn.
In December, Illumina agreed to divest Grail.
“We are now divesting Grail for sure, and I'm actually very pleased with the progress so far,” Thaysen said on the call Thursday.
The company is pursuing a third-party sale or capital markets transaction and expects to have all terms of the divestiture finalized by the end of June, Thaysen said.
“Advisers are actively moving the process forward on both the sale and capital market paths,” said Thaysen, who became CEO in September, nearly three months after Francis deSouza resigned from the post.
An analyst on the call questioned how Illumina could pursue a capital markets transaction at its current spending levels. Thaysen said more information on the path forward for Grail would be made public very late in the first quarter or early in the second.
In addition to the Grail divestiture, Illumina is working to position the core company for accelerated growth and profitability when market conditions improve, he said. Illumina began shipping the NovaSeq X sequencing platform last year and is aiming to expand the installed base and customer use of its instruments.
The company’s outlook assumes the current challenging macroeconomic environment persists this year, and tighter funding and budget pressures continue to impact customer purchasing decisions, executives said. Full-year 2024 core revenue is projected to be flat from 2023.
“Globally, we expect our customers will remain cautious. And for now, we continue to expect 2024 results to look very similar to 2023,” Thaysen said.
Workforce reductions, part of a plan to increase productivity and cost savings, continued in January, he said. The latest round of cuts affected 111 employees including senior managers, scientists and engineers at the company’s San Diego headquarters, according to a notice filed in California.
The 12% total reduction in Illumina’s workforce over the past year began with cuts made in November 2022, a company spokesperson said in an email.
In January 2023, Illumina had about 10,200 full-time employees, 60 part-time employees and 1,400 contingent workers, according to its annual report. Illumina employed about 9,300 people at the start of 2024.
