Over 200 layoffs planned by Lonza at clinical production facility in California

The Swiss Contract Development and Manufacturing Organization (CDMO) is now signaling a massive retrenchment in California, just months after Lonza triumphantly declared significant growth in its staff. Lonza is set to downsize 218 positions at its Hayward, California site, specializing in the clinical production of biotherapeutics, bioreagents, and biomaterials within its 120,000-square-foot facility, as per the recently issued Worker Adjustment and Retraining Notification (WARN) alert.

The announced layoffs are slated to take effect on February 2, according to the WARN notice, which attributes the job cuts to a permanent closure. Lonza is in the process of decommissioning its mammalian clinical manufacturing facility in Hayward, with a phased closure scheduled to commence in the first quarter of 2024 and conclude by the first quarter of 2025, as confirmed by a company spokesperson through email communication.

The decision to shutter the facility is explained by the evolving demand dynamics in the CDMO market, with a focus on integrated clinical-commercial offerings. The spokesperson clarified that the Hayward site presents limited growth opportunities beyond its clinical scope. Despite this strategic shift, Lonza affirms its commitment to supporting affected employees and maintaining services for existing customers.

Lonza’s involvement with the Hayward facility dates back to 2017 when it acquired the site from Shire. The acquisition by Shire had occurred in 2016 as part of its $32 billion takeover of Baxalta, a spinoff from Baxter. Lonza’s substantial round of layoffs follows closely on the heels of its hiring initiatives in October.

In the initial part of that month, Lonza disclosed an expanded collaboration with an undisclosed “major biopharmaceutical partner” and unveiled plans to establish a dedicated commercial filling line at its Stein, Switzerland site. 

The project entailed the addition of approximately 115 jobs. Shortly thereafter, Lonza extended a long-term collaboration with another unnamed partner to enhance commercial supplies of antibody-drug conjugates (ADCs) at its Visp, Switzerland site. This expansion involved the introduction of two new bioconjugation suites, with Lonza committing to hiring around 180 workers for the suites expected to be operational in 2026.

Notably, the trend of workforce reductions and site closures in the biopharmaceutical sector that characterized 2023 appears to persist into the new year. Recently, Gilead Sciences announced plans to relocate a biologics development and manufacturing facility in Oceanside, California, to its Foster City campus in the same state. Additionally, Gilead is abandoning prior intentions to expand its manufacturing footprint in Oceanside. The industry landscape continues to witness dynamic shifts, both in expansions and contractions, as companies adapt to evolving market demands and strategic priorities.

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