Biotechnology firm Novacyt has announced plans to cut approximately 40% of its workforce as part of a major restructuring initiative. The molecular diagnostics company, which is listed on London's junior AIM market and in Paris, launched a consultation process on Monday that could affect up to 90 of its roughly 230 employees.
Impact on Workforce
The company has not disclosed how many UK-based staff would be impacted, but the proposed cuts could affect workers across its global offices. Novacyt has facilities in La Vesinet, France; Singapore; the United States; and Canada, in addition to its base in Manchester.
Financial Implications
Novacyt stated that the restructuring would reduce its annual cash burn by up to £4 million once fully implemented. The company expects to incur a restructuring charge of approximately £1 million. Shares fell in early trading following the announcement.
Strategic Rationale
The proposed restructuring is part of Novacyt's efforts to accelerate its plans to focus and streamline its operations and cost base. This follows the successful launch of several new products over the past 18 months and the recent acquisition of Southern Cross Diagnostics.
Novacyt added: "A further announcement will be released in respect of the outcome of the consultation process in due course." The company is consulting with employees and their representatives as part of the process.
