Staff Reports
A drug maker with plants in Seymour and Carmel, New York, announced plans Monday to consolidate research and development operations into a single facility, resulting in the layoffs of 80 people.
Most of the job losses will be at Seymour, according to a news release from Philadelphia-based Lannett Co. Inc.
The restructuring is being done in part to cut costs, Lannett Chief Executive Officer Tim Crew said in a news release announcing the restructuring.
“Our goal is to proactively strengthen our business by enhancing our manufacturing efficiencies and improving our cost structure,” he said. “For the coming year, we expect to grow our topline, driven by a solid pace of new product introductions, as we have done over the past couple of years. In our recently completed fiscal 2020 fourth quarter, we launched six new products, which have already secured customer awards of approximately $15 million.”
According to the news release, the Seymour employees affected by the move will receive severance packages and other benefits.
The number of jobs being reduced represents about 8.5% of the company’s workforce.
Another factor of the restructuring is to provide competitive product pricing.
“At the same time, we had expected pricing pressure in fiscal 2021 on certain key products, including generic Fluphenazine, currently our largest revenue product and one that has higher than average gross margin,” he said. “A competitor has recently received approval for this product and we believe will launch shortly. We implemented the restructuring and cost savings plan in part to mitigate the impact of competitive pricing pressure.”
The restructuring will result in cost savings of more than $15 million annually, according to the company.
During a restructuring in 2016, the company cut its workforce by 10%.
In 2019, Lannett was Jackson County’s fourth largest industrial employer with 706 employees.