Dive Brief:
- Abbott Laboratories is laying off a total of about 400 workers at two manufacturing sites in Maine, a casualty of the steep decline in demand for the company's COVID-19 tests.
- An Abbott spokesperson confirmed the layoffs at its Maine facilities in Scarborough and Westbrook, following a report on Thursday by a local TV station in Portland. "We’ve recently seen a significant, rapid decline in COVID-19 testing demand and anticipate this trend will continue," the spokesperson said in an emailed statement. The move follows the recent axing of 2,000 temporary jobs at the company's Gurnee, Illinois facility, where COVID-19 tests were also being manufactured.
- Abbott in June cut its 2021 outlook blaming global vaccination efforts for a sharp decline in demand for its coronavirus-related diagnostics, particularly for rapid tests. Other companies have reported a drop in COVID-19 testing demand due to vaccines, with sales at Becton Dickinson and Quidel falling short of analyst expectations in their latest earnings. While BD last month doubled down on its testing guidance for the rest of the year, Quidel in March lowered its 2021 revenue guidance due to the drop-off in first-quarter test demand.
Dive Insight:
What a difference a year makes for Abbott's COVID-19 testing business. Abbott in May 2020 announced it was expanding its Maine workforce to Westbrook to ramp up production of rapid coronavirus test kits by leasing a former sporting goods distribution center that would employ about 1,200 workers. Now, the company is laying off about 300 full-time employees in Westbrook and another 100 in Scarborough.
The Scarborough and Westbrook sites "will continue to play an important role in manufacturing tests for COVID-19 and other infectious diseases around the world," the spokesperson said.
The official declined to reveal how many employees continue to work at the Scarborough and Westbrook manufacturing sites, calling that information proprietary and competition sensitive.
Currently, Abbott forecasts about $4 billion to $4.5 billion in COVID-19 testing sales in 2021, including second-quarter sales of around $1.1 billion. The company previously forecasted about $6.5 billion to $7 billion in coronavirus test sales on its fourth-quarter earnings call in late January.
Maine wasn't the only part of Abbott's manufacturing base to feel the impact of declining test demand. Abbott recently closed its Gurnee, Illinois facility where COVID-19 tests were made, letting go about 2,000 workers.
Abbott in August 2020 told the Chicago Sun-Times that it planned to hire 2,000 people in Gurnee and that the jobs would be in place "for the foreseeable future" but did not give a more specific timeframe. At the time, the company had been awarded a $760 million contract by the Trump administration for 150 million of its rapid, point-of-care BinaxNOW antigen tests.
However, the Abbott spokesperson insisted that the plans for the Gurnee location from the start were for a temporary workforce. "We were crystal clear from the beginning," he said. "Those were always temporary workers."
A former Abbott employee, who worked at the Gurnee facility which opened at the beginning of September 2020 until the recent layoffs around Memorial Day 2021, said in an emailed statement that the company "did not have the professionalism" to notify workers in advance that they were being let go.
"We were told that we would be off for the holiday weekend and be sure to return after. Then, they closed the warehouse with zero notice," according to the former employee.
The Abbott spokesperson denied that the company terminated the employment of the temporary workers at Gurnee without notice. They added that those employees received three days of extra pay for their time, despite any financial obligation on Abbott's part.
