Cepheid to institute job terminations for 167 employees in California
In a recent development, Cepheid, a subsidiary of Danaher, has announced plans to lay off 167 employees in California by May 12, following a decline in its respiratory sales. This latest round of job cuts comes after more than 1,300 employees were let go in 2023 and 2024 due to a downturn in demand, as reported earlier in an article titled "Cepheid to cut more than 600 employees in California" by Ricky Zipp.
The decline in respiratory sales is a marked shift from the peak levels reached during the COVID-19 pandemic. According to Danaher CEO Rainer Blair, the company expects "double-digit plus growth out of the core portfolio in '25 and for the long term." However, this year, Danaher forecasts respiratory sales of $1.7 billion for Cepheid, a significant drop from almost $2 billion in 2024.
Despite the decline in respiratory sales, Cepheid has managed to grow its installed base more than three times since the pandemic. This growth, along with an expanded menu of diagnostic tests, forms the basis of the growth forecast. The company's diagnostic sales increased from $6.56 billion in 2019 to $10.85 billion in 2022, before slipping in 2023 but returning to growth in the following year, reaching $9.79 billion.
The layoffs affect employees at 14 sites, with more than half of the affected locations being at Cepheid's headquarters in Sunnyvale, California. It is important to note that Cepheid drove fast growth at Danaher's diagnostics group during the COVID-19 pandemic.
In April 2023, Cepheid had already laid off 686 people in California. The company had also disclosed the elimination of an additional 92 positions in California in the same year. Danaher acquired Cepheid for about $4 billion in 2016.
However, the decline in respiratory sales this year was not observed in the previous two years, with a "big spike" in September, October, January, and February. The core non-respiratory reagent portfolio of Cepheid grew in the mid-teens in the fourth quarter, indicating a resilience in other areas of the company's operations.
Despite the challenges, Danaher remains optimistic about Cepheid's long-term growth prospects, with Blair stating that the company expects "double-digit plus growth out of the core portfolio in '25 and for the long term."
- Cepheid's diagnostic sales, after slipping in 2023, returned to growth in the following year, reaching $9.79 billion.
- The decline in respiratory sales this year was not observed in the previous two years, with a "big spike" in September, October, January, and February.
- The core non-respiratory reagent portfolio of Cepheid grew in the mid-teens in the fourth quarter, indicating a resilience in other areas of the company's operations.
- Danaher expects "double-digit plus growth out of the core portfolio in '25 and for the long term," despite the challenges faced by Cepheid.
- Analytics on the trends in Cepheid's sales could help predict future growth and understand the impact of AI, medtech, finance, and business factors on its performance.
