Catalent to lay off hundreds at manufacturing sites in Texas, Maryland and Indiana

Early this month, when Catalent reported its earnings for the last quarter, it slashed its revenue projection significantly for 2023, citing among other factors, a decline in COVID-19 revenue.

Without going into detail, Catalent added that it had begun to implement “cost efficiency activities,” according to chief financial officer Tom Castellano, and a “fiscally prudent approach,” added CEO Alessandro Maselli.

The nature of those measures has become apparent through recent Worker Adjustment and Retraining Notifications (WARN) posted in Texas and Maryland, where the company is laying off more than 210 employees.

Catalent also is reducing its staff at its sprawling site in Bloomington, Indiana, by 400. The news was reported on Wednesday by local news outlet the Bloomingtonian. In a letter to employees, Catalent said affected employees would be notified by the end of this week. 

At its site near Houston, Catalent is laying off 77 workers, effective on Jan. 15 of next year. The 32,000-square-foot site serves as clinical development and manufacturing facility for cell therapies.

And at two sites in Maryland, located minutes apart in Gaithersburg and Rockville, the CDMO has given the boot to 82 and 53 employees, respectively. Those actions become effective on Jan. 14 of next year. The reason provided at both sites was “plant closure,” according to the WARN notices.

Catalent confirmed the layoffs and said that the company is offering severance and "job transition support to all impacted employees."

"During the pandemic, Catalent significantly increased its cost base to continue to meet the needs of our customers and deliver essential products, as well as to meet the needs specific to the pandemic," a company spokesperson wrote in an email. "Given the current phase of the pandemic, the challenging global economic environment, and the need to ensure that Catalent continues to operate efficiently, we have made the difficult decision to reduce or delay some capital expenditure projects and also reduce the size of our workforce in certain areas."

Another cost-cutting measure was revealed earlier this week as Catalent has paused work at its biologics development and manufacturing facility near Oxford, U.K., less than eight months after purchasing the plant.

Earlier this month, Catalent’s shares tumbled by 36% when it reported a decline in quarterly earnings. Earnings per share fell from $0.49 in last year's third quarter to $0.00 this year. The company also sliced its 2023 revenue forecast from a range of $5.0 billion to $5.2 billion to between $4.6 billion and $4.9 billion.

“There are a number of factors that continue to negatively impact margins in fiscal 2023 that we reviewed last quarter but will be partially offset by our cost-saving actions,” Castellano said during the quarterly conference call.

The cuts at the Bloomington site come just seven months after Catalent disclosed a plan to invest $350 million in the factory, which included hiring more than 1,000 new employees over several years. The allocation was earmarked for drug product manufacturing and vial filling.

"Since the start of the pandemic, Catalent’s Bloomington facility has played a critical role in producing the vaccines and therapies that have protected public health around the world," the Catalent spokesperson said. "To meet the needs of the pandemic, we added personnel to the facility at an extraordinary rate to ensure that we could meet our commitments, but now the size and structure of our organization needs to match current demands in order to increase efficiency and cost-effectiveness."