Facing a continued decline in sales, CRO Charles River ($CRL) said it will cut 4 percent of is 8,500-person workforce, or about 300 jobs. This is not the first time the CRO announced layoffs in 2010. In January, the company cut 300 people and suspended operations at its Preclinical Services facility in Shrewsbury, MA. At the time, Charles River noted that the global recession had hit drug developers hard, causing them to cut all but the most essential programs. That left preclinical research out in the cold; the Q3 report reveals that preclinical services continue to drag the company down.
The CRO reported Q3 sales of $276.1 million, a decline of 7.2 percent from $297.5 million in the third quarter of 2009. Sales declined in both the Preclinical Services (PCS) and Research Models and Services (RMS) segments. The layoffs will hit personnel from RMS, PCS and corporate functions. Charles River will also further reduce discretionary spending. A leased satellite PCS facility in Laval, Quebec will be closed, and the company plans to consolidate its Discovery and Imaging Services operation in Michigan with its larger facility in North Carolina. Charles River expects to save $40 million annually as a result of the cutbacks and closures
"[T]he PCS segment has continued to feel the effects of constrained development spending as evidenced by lower volumes, a less robust study mix and continued pricing pressure," explains Charles River CEO James Foster in a statement. "The actions we are taking to appropriately align our infrastructure to current demand will enable us to profitably meet the challenges we are facing, and position us for improved profitability when demand improves."
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