Illumina (ILMN) commences headcount reduction
Illumina (NASDAQ:) disclosed:
On June 21, 2023, Illumina, Inc. (the “Company”) commenced a headcount reduction as part of a multiyear plan to realign its operating expenses while maintaining focus on its innovation roadmap and sustainable long-term growth. The Company expects further headcount reduction in the third quarter, intends to reduce its global real estate footprint and associated costs, and is taking other meaningful actions to reduce its expense base. The Company has committed to reduce its annualized run rate expenses by more than $100 million in 2023.
The Company estimates that it will incur aggregate charges of approximately $25 – $35 million in connection with the reduction in force commenced on June 21, 2023, and additional reductions this year. The Company expects that the majority of these charges will be incurred in the second quarter of 2023 and substantially all of these charges will have been incurred by the end of 2023. The Company estimates that substantially all of these charges will result in cash expenditures relating to severance payments, employee benefits and associated costs.
In addition, on June 22, 2023, the Company determined to proceed with a plan to reduce its global real estate footprint by exiting its i3 campus in San Diego, California, and evaluating its options with respect to its campus in Foster City, California. The Company carries assets on its balance sheet related to these campuses valued at approximately $60 million and $186 million, respectively. The Company expects to incur charges in connection with exiting the i3 campus and a portion of the Foster City campus, but currently is not able to provide an estimate of the timing or amount of charges or the potential cash outlay it may incur in connection with these events. The Company will file an amendment to this Current Report on Form 8-K, as necessary, when such costs become estimable.
These charges will be excluded from non-GAAP financial metrics.