Swingeing staff cuts at LION as firm restructures
50 per cent as part of a new restructuring drive, with most cuts
being felt at the company's facilities in Heidelberg, Germany.
The German bioinformatics has put in place a series of new measures to cope with declining revenue, with a new CEO and CFO in place, and after the latest round of cuts will operate with between 50 and 70 employees, down from the 142 staff at present, in 2005-6.
Two weeks ago, the company reported second quarter revenues of €2.6 million, down from €5.0 million a year ago, with a net loss down to €3.4 million from over €6 million as a result of cost-cutting measures. At the time, the company was forecasting that revenues would rise in the latter half of the year.
However, in a conference call, new CEO Thure Etzold said it had became apparent in the last two weeks that some anticipated deals could not be relied on, throwing these forecasts into disarray.
The staffing change follows the surprising resignations of former co-CEOs Daniel Keesman and Martin Hollenhorst, as well as the creation of a new supervisory board that effectively places LION into a holding company mode.
The aim is to safeguard LION's core SRS bioinformatics and LeadNavigator cheminformatics software.
The Heidelberg headquarters will be reduced to core management functions and staff needed to perform duties needed for its recently announced cheminformatics partnership with Bayer. Less affected will be LION's subsidiaries in Cambridge, UK, and Cambridge in Massachusetts,in the US, which will continue to handle SRS and LeadNavigator, respectively. They will get new funds 'only if profitable', according to
Also, LION earlier this week decided to delist its American depositary shares from the Nasdaq exchange, which will allow it to cut costs.
LION's new CFO, Peter Williger, told the conference call that the company is expecting revenues of €8-€10 million and a net loss of €14-€16 million for fiscal 2004, including 2-3m in restructuring costs, with a cash position of €25million as of march 31, 2005. The firm should return to profitability in fiscal 2005, he said.
