In a recent Worker Adjustment and Retraining Notification filed in March, Danaher’s subsidiary Cepheid has announced plans to lay off 167 employees across various sites in California. These layoffs are part of ongoing organizational adjustments as the company navigates post-pandemic market conditions. The majority of affected locations are concentrated at Cepheid's headquarters in Sunnyvale, California. This move comes on the heels of significant layoffs that occurred in 2023 and 2024, with over 1,300 positions eliminated in the state. Despite these reductions, Danaher anticipates growth in other segments of its business.

During the peak of the COVID-19 pandemic, Cepheid played a crucial role in driving rapid expansion for Danaher’s diagnostics group. Diagnostic sales surged from $6.56 billion in 2019 to $10.85 billion in 2022. Although there was a slight decline in 2023, the company managed to regain momentum last year, achieving diagnostic revenue of $9.79 billion. However, projections indicate a drop in respiratory sales by nearly $300 million this year, bringing them down to approximately $1.7 billion. CFO Matt McGrew explained during an earnings call that this figure aligns with what the company considers normal for a typical respiratory season in a post-pandemic endemic environment.

Historically, Cepheid experienced significant spikes in respiratory sales during specific months due to seasonal patterns, such as September and October when people return to school and work, followed by another peak in January and February. However, these trends were less pronounced this year, prompting Danaher to adjust its expectations accordingly. As respiratory sales have declined and stabilized post-pandemic, Cepheid has focused on expanding other areas of its business. Notably, its core non-respiratory reagent portfolio saw substantial growth, increasing in the mid-teens range during the fourth quarter.

Danaher CEO Rainer Blair expressed optimism about future growth prospects, particularly within Cepheid’s core portfolio. At a TD Cowen event last month, Blair forecasted double-digit growth for the long term, attributing this potential to the expansion of Cepheid’s installed base and its growing menu of diagnostic tests. Since the onset of the pandemic, the company has reportedly tripled its installed base, providing a strong foundation for continued expansion.

Despite the challenging market conditions leading to workforce reductions, Cepheid remains committed to leveraging its expanded capabilities and diversified product offerings to drive future success. The layoffs reflect strategic efforts to align resources effectively with current market demands while positioning the company for sustained growth in the coming years.