Employees at Genzyme Genetics are dealing with one of the unfortunate realities of mergers and acquisitions--layoffs. Lab Corp. of America ($LH), which bought Genzyme Genetics from Genzyme last year for $925 million, gave word to workers last week that 169 jobs would be cut in the IT and reimbursement departments, the Worcester Business Journal reported.
You'll recognize a familiar tune here. LabCorp, the Burlington, NC-based laboratory testing giant, said in an internal memo that the cuts were made because of redundancies between Genzyme Genetics and LabCorp. IT and reimbursement staffs. That means that 23 IT workers from Genzyme Genetics will be let go between May and September, according to the memo. There are 146 jobs being cut in Genzyme Genetics' reimbursement group in Westborough, MA.
When Genzyme and LabCorp announced this deal in September, the companies said that LabCorp planned to offer jobs to 1,900 Genzyme Genetics employees. Yet don't forget why Genzyme sold this diagnostic testing unit in the first place. The group wasn't as profitable as Genzyme's core therapeutics business, and outgoing Genzyme CEO Termeer was under pressure to boost shareholder value (Of course, Termeer eventually agreed to sell his entire company to French drug powerhouse Sanofi-Aventis for $20.1 billion earlier this year after holding out for months).
LabCorp acquired Genzyme Genetics when the Genzyme unit was "barely making money," Kemp Dolliver, who follows LabCorp on behalf of Avondale Partners, told the Worcester Business Journal. He told the newspaper that he wasn't surprised to hear about the cuts because of the low level of profitability at Genzyme Genetics.
- read the Worcester Business Journal's story