Abbott begins laying off hundreds of workers as COVID test demand evaporates: report

A month after Abbott slashed its sales forecasts for the remainder of the year—as demand evaporates for COVID tests, in the light of rising vaccination rates and drops in new infections—the company has begun laying off hundreds of workers at its diagnostic plants. 

According to a report from the ABC television station WMTW in Portland, Maine, Abbott is letting go 400 full-time employees at its locations in Westbrook and Scarborough, focused on the production of rapid antigen tests. 

At Westbrook specifically, 310 layoffs were slated to begin July 7, according to a WARN notice filed with the state.

“These sites will continue to play an important role in manufacturing tests for COVID-19 and other infectious diseases around the world,” the company said in a statement to WMTW. “We’re grateful for the contributions our workers in Maine made to our country during the pandemic."

RELATED: Abbott takes an ax to sales forecast as COVID testing dries up faster than expected

Abbott had been banking on the need for its rapid tests, such as the card-based BinaxNow, to be propped up by coronavirus surveillance programs and routine screenings to help clear people to return to work or school.

However that demand dried up faster than expected, the company said in early June, after the Centers for Disease Control and Prevention put out guidelines saying fully vaccinated people could skip the swabs before re-entering daily life or traveling. 

In addition, based on the strength of vaccines from Moderna, Pfizer, BioNTech and Johnson & Johnson, the CDC said people could forgo testing even after being exposed to an asymptomatic person with COVID-19 in certain situations.

RELATED: Abbott's rapid antigen COVID-19 test cleared in Europe for at-home, direct-to-consumer sales

As a result, Abbott slashed its financial forecasts by as much as $2 billion and cut its spending plans for the remainder of the year—including hundreds of millions slated for R&D. The moves rolled sales and spending levels back to something more in line with pre-pandemic operations.

At the same time, Abbott CEO Robert Ford said the company would maintain capacity to scale up test production again if called to respond to future surges—but said he isn't sure the same number of tests would ever be needed compared to 2020’s sky-high demand.

Last year in Maine, during the initial stages of the pandemic, Abbott said it was expanding its workforce in Westbrook, by buying a former sporting goods distribution center and converting it into a test kit-production facility ultimately capable of employing about 1,200 workers, according to WMTW.