Impax Laboratories Inc. (IPXL) announced a reduction in its workforce in order to streamline its operations in response to the need to reduce expenses and adapt to changing market conditions. This reduction chiefly affected manufacturing operations and is planned to reduce Impax's cost structure and scale the organization appropriately for its current needs; with the action resulting in a reduction of nearly 110 positions, with the majority at the Hayward, California manufacturing facility.
According to the company, this job cut became necessary as a result of lower production volumes at the Hayward facility due to the transfer of products to its more cost efficient Taiwan plant, previously announced product discontinuances and delayed product launches. The firm expects the reduction in both personnel and other variable expenses, including the product discontinuances, to yield an annual cost savings of about $15.0 million. Impax believes that the total savings within cost of goods sold in 2013 from these actions would be about $10.0 million.
Further, Impax said it would reduce its contracted brand sales force from 84 to 64 positions, as well as four regional sales management positions, and this short-term action is due to the delay in approval for RYTARYTM and is expected to result in a reduction of the company's selling expenses of around $2.0 million in 2013. The company expects the reduction in workforce to result in a charge of some $2.4 million in the second quarter 2013.
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