We Called It: Zymogenetics Axes 161!!
April 29, 2009 at 5:27 pm EST | Tags: Economy & Layoffs, Gossip & Rumors
Just three weeks after we wrote about a rumored upcoming Zymogenetics (ZGEN) layoff, the axe has officially swung.
Today, ZGEN announced they will be reducing its workforce by 32%, or 161 employees. The company says its reorganizing its operations to focus resources on assets with the potential to generate the greatest value for shareholders. ZGEN also said the axes would save the company $30M in annual expenses, yet come with an $8.5M severance charge.
Math time!
A = number of pink slips = 161
B = total ZGEN severance charge/cost = $8.5M
C = total annual ZGEN $ savings = $30M
D = severance/employee = B/A = $52,795 (not bad vs. some other ones we’ve seen)
E = average salary/employee = C/A = $186,335 (too high!!!)
Hmmm, we doubt ZGEN, or any biotech, is so generous. But, whatever. Here’s what CEO Douglas Williams said:
“We’re taking steps to reduce our costs, align our spending with our highest corporate priorities and conserve our financial resources. While it is very difficult taking these actions, they are necessary given challenging market conditions and the changing focus of our business plan. Going forward, we believe that ZymoGenetics will be a stronger, more sustainable company with substantially reduced dependence on the capital markets for funding. We appreciate the significant contributions made by all of our employees, including those departing, toward the company’s progress to date and in support of our plan to build a valuable and sustainable business.”
ZGEN recently signed a lucrative deal with BMS for its lambda IFN program. Sales of RECOTHROM, the company’s topical recombinant thrombin, have been less than stellar.
In our post we estimated axes to be about 10-20%, or about 50-100 employees. We also mentioned the company’s decent cash position of about $100M, but that ZGEN might have to slim down ahead of lamba-IFN data results in 2009.
What a crappy day…
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No- E is not the average salary/employee.
E includes salary, but is the total savings for labor, benefits, allocations for space/supplies/recruitment etc. With a 33% reduction in employees, you would need less space, desks, computers etc. So the average salary is likely to be much lower.
No- E is not the average salary/employee.
E includes salary, but is the total savings for labor, benefits, allocations for space/supplies/recruitment etc. With a 33% reduction in employees, you would need less space, desks, computers etc. So the average salary is likely to be much lower.