Absci, a Vancouver biotech company using artificial intelligence to develop new pharmaceuticals, laid off a few dozen people Tuesday as part of a broader restructuring.
“While reorganizing the business was a difficult decision, it will make the company financially healthier and protect our long-term growth plans and vision,” CEO Sean McClain wrote in a note to employees posted on the company’s website. He said Tuesday’s cuts will streamline operations and research in response to changing economic conditions.
“By focusing our resources, we are positioning ourselves to better enable the creation of next-generation medicines,” McClain wrote. “While this does not make the decisions any easier, we know that disciplined and strategic prioritization puts us in a better position to be successful.”
Absci didn’t disclose how many workers lost their jobs, but employees said the total numbered around 40. The company had more than 200 employees at the end of 2021 and had been hiring rapidly in the early part of this year.
Employees said Absci is paying several weeks of severance for some laid-off workers, and McClain wrote on LinkedIn that the company will compile a resume book for laid-off employees that Absci will circulate among other prospective employers.
The layoffs are the latest in a string of cutbacks by technology companies in Oregon and southwest Washington amid growing economic uncertainty. Absci’s stock has lost nearly 90% of its value since the company’s initial public offering last year.
Absci raised about $200 million in its July 2021 IPO, money to fund its technology for developing new drugs faster and less expensively than with conventional methodology. Its market value climbed above $2 billion in the days after its offering.
But Absci, founded in 2011, is still very much a startup. It has drug development deals with major pharmaceutical manufacturers but reported just $4.8 million in revenue last year as it works to demonstrate its technology can deliver on its promise.
Absci had $226 million in cash on hand at the end of March, according to the company’s most recent quarterly financial statement, down from about $250 million three months earlier. That suggests the company has enough cash to sustain operations for two more years or more.
Prospects for replenishing its war chest are diminishing, though, with a bear market on Wall Street and interest rates rising sharply.
The company’s stock price has fallen from a high of $31.53 in August 2021 to $3.90 at Tuesday’s close. Absci’s market value has fallen to around $360 million.
The regional labor market in Oregon and Washington remains extremely tight, and Oregon’s jobless rate is near a historic low.
But several technology companies have cut staff or slowed hiring in recent weeks. Some cite a diminished economic outlook but others say they’re adjusting to their own business needs.
Portland software company Puppet laid off 15% of its staff last week following its sale to a Minnesota firm, Perforce. The new owner said the cuts followed a review of business needs following the transaction and were unrelated to the economy.
Portland legal technology firm Smarsh laid off workers this summer, too, and also said its reorganization was unrelated to the economic outlook.
HP Inc. furloughed contract factory workers in Corvallis in July, and plans another round of two-week furloughs in September, amid a decline in printer demand. Intel, Oregon’s largest corporate employer, has slowed hiring amid a steep decline in its sales outlook but hasn’t announced any layoffs.
— Mike Rogoway | [email protected] | Twitter: @rogoway | 503-294-7699
This content was originally published here.
