Illumina has begun to lay off about 5% of its global workforce spanning more than 9,100 people, a move the DNA sequencing giant described as “proactively realigning” its core operations in the face of broader macroeconomic difficulties that the company expects will last into next year.
In a brief filing (PDF) with the Securities and Exchange Commission, the company said it expects to incur restructuring charges for the head count reduction within the fourth quarter of 2022.
The job cuts also come after Illumina announced earlier this month that it would take a nearly $4 billion impairment charge writing down the value of its Grail business, which it acquired for $8 billion in August 2021 over the objections of international antitrust regulators.
That long-running saga came to a head this past September after the European Commission officially moved to block the deal. Though Illumina said at the time it planned to appeal the decision, the company also said it would start exploring divestment options for the future of Grail and its multicancer early detection blood test known as Galleri.
The $3.91 billion impairment charge was announced Nov. 3 alongside the company’s third-quarter earnings report (PDF)—which, despite a 1% increase that pushed sales to $1.12 billion, also saw Illumina lower its revenue forecasts for the remainder of 2022.
After predicting 4% to 5% annual growth three months earlier, the company said it now believes revenue will be about flat with 2021’s $4.5 billion haul, due in part to pauses in sales as customers wait for its upcoming NovaSeq X line of DNA analyzers—which Illumina says can sequence a whole human genome for about $200—as well as declines in the number of samples processed among customers’ research projects and changes in foreign currency exchange rates.
“Our third-quarter results were in line with our expectations, with traction across our portfolio offset by challenging macroeconomic dynamics that we expect will continue into 2023,” CEO Francis deSouza said in a release at the time, adding that Illumina had already logged 50 preorders for the NovaSeq X system worldwide following its late September unveiling.
Meanwhile, Grail, which Illumina has been managing at arm’s length since its acquisition, posted $10 million in revenue last quarter versus about $187 million in R&D and operating expenses. This year, the cancer testing outfit signed deals with John Hancock to serve as the first life insurance carrier to offer its Galleri test to customers. For 2022, Illumina expects Grail’s annual revenue to land between $55 million and $65 million.