Parexel cutting 850 jobs as it dims its revenue outlook

CRO giant Parexel ($PRXL) is planning to shed about 850 jobs over the next year in an effort to cut costs as it lowers its financial expectations for the quarter.

The company, headquartered in Boston, is cutting into its payroll in an effort to save between $20 million and $30 million a year. The restructuring will result in charges of $35 million to $40 million over the next 12 months, Parexel said, and the CRO figures it can wrap up the transition by June 30, 2016.

Meanwhile, Parexel is expecting to bank between $517 million and $533 million in the fiscal quarter ending this month, down from its previous guidance of $520 million to $540 million. For the full fiscal year, which ends June 30, the CRO is looking for revenue of just over $2 billion, coming in roughly in line with its earlier projections.

Parexel CEO Josef von Rickenbach

Parexel is betting it can grow its fiscal 2016 revenue by as much as 14%, forecasting up to $2.2 billion for the year. Earnings per share are tabbed to come in between $2.97 and $3.33, a more than 20% increase over 2015 at midpoint.

Heading into fiscal 2016, "we believe that we have good momentum, a strong and diversified backlog, and a healthy business development pipeline," Parexel CEO Josef von Rickenbach said in a statement. "... We are accelerating a number of our ongoing improvement plans, and as a result of these efforts, plan to restructure certain activities. We believe that this will strengthen the company by increasing our competitiveness in the marketplace, and will help us to deliver long-term sustainable growth in revenue and margins."

- read the statement