Thermo Fisher lays off 230 workers, citing 'sudden downturn' in COVID test demand

Fresh off publishing an earnings report showing a two-thirds drop in sales of its COVID-19 tests in 2022, Thermo Fisher Scientific has begun laying off hundreds of workers at three manufacturing sites in California.

According to a trio of Worker Adjustment and Retraining Notification (WARN) notices added to the state’s database this week, Thermo Fisher is permanently eliminating a total of 230 jobs at the sites, all of which are in San Diego County.

In a letter sent to California’s Employment Development Department (EDD) regarding the workforce reduction, Nancy Austin, vice president of human resources within Thermo Fisher’s genetic sciences group, wrote that the layoffs began Jan. 31 and are expected to continue through Feb. 28.

The cuts “are due to unforeseeable business circumstances caused in part [by] a sudden downturn in demand for COVID-19 testing products and other evolving economic and business conditions,” Austin wrote in the letter, which was sent to Fierce Medtech by the EDD.

The staffing reduction allows Thermo Fisher to improve efficiency and "remain in line with current manufacturing volume demands," according to a company statement sent to Fierce Medtech.

"Decisions that impact colleagues and their families are never taken lightly," the statement continued. "These actions are designed to better help us serve our customers, strengthen our global competitive position and provide for the long-term growth and success of our organization."

The bulk of the layoffs—198 in total—will come from a pair of San Diego addresses associated with Mesa Biotech. Thermo Fisher acquired the diagnostics developer in early 2021; worth up to $550 million, the deal saw Thermo Fisher both taking advantage of the flood of COVID-related earnings from the previous year and continuing to invest in its COVID test-making capabilities.

When the acquisition closed, Thermo Fisher said its first order of business would be to integrate Mesa’s Accula point-of-care PCR testing system into its own COVID test offerings. Beyond that, Mesa’s portfolio includes molecular diagnostics for the flu, respiratory syncytial virus and Strep A.

The remaining 32 layoffs will come from another of Thermo Fisher’s manufacturing sites in San Diego. Not all employees at the three sites were affected by the layoffs, Austin noted in the letter.

According to a list included in the notice, the majority of the eliminated jobs are various levels of manufacturing operator positions. Others include engineers, quality control scientists, environment, health and safety technicians and more.

The layoffs began just as Thermo Fisher was wrapping up a previous round of COVID-related cuts elsewhere in California. Another pair of WARN notices filed with the state in mid-November detailed a total of 95 layoffs, split almost evenly between sites in Pleasanton and South San Francisco.

Those cuts were slated to be completed by the end of January. In another letter submitted to the state employment agency, Austin once again attributed the layoffs in part to the “sudden downturn” in demand for coronavirus diagnostics, though the included list of eliminated roles was focused more on systems design and software engineers, chemistry and molecular biology scientists and other R&D positions, rather than manufacturing jobs.

The steep drop-off in COVID testing demand was on full display in Thermo Fisher’s recent 2022 earnings report. For the full year, the company reported $3.11 billion in sales from the segment, only about a third of the $9.23 billion it took in the previous year.

Editor's note: This story was updated to include a statement from Thermo Fisher.