In April 2023, Science 37, a company facing financial challenges and a significant stock decline, announced the layoff of nearly 140 employees in the U.S. and Europe, amounting to almost a third of its workforce. Despite these cuts, the company plans to expand its operations in Asia, opening three global "Centers of Excellence" and employing nearly 200 people by the end of 2023. In this article, we'll discuss what led to these layoffs, the reasons behind them, and the potential future impact on the company and its employees.
Science 37's decision to lay off nearly 140 employees in the U.S. and Europe was driven by the need to reduce expenses and shift resources to cheaper markets around the world. The company aims to generate annual gross cash savings of about $24 million through these layoffs. The company faced financial challenges, including high selling, general, and administrative expenses, which totaled about $103.3 million in 2022, and a net loss of $51 million at the end of the year. CEO David Coman discussed the introduction of a global center of excellence model to gain greater operational efficiency and accelerate the path to profitability. This model involves opening three global "Centers of Excellence" in India, Pakistan, and Slovakia, which will employ nearly 200 people by the end of 2023. The decision to cut jobs in the U.S. and Europe and expand in Asia reflects broader trends of companies seeking operational efficiencies and cost savings by leveraging global markets.
Science 37 expects to generate annual gross cash savings of about $24 million from the layoffs, which will help reduce costs and shift resources to cheaper markets in the short term. In the long term, the company aims for cash flow positivity by the end of 2024, despite high selling, general, and administrative expenses totaling about $103.3 million in 2022. To achieve this, Science 37 is making strategic adjustments, such as reducing its workforce in the U.S. and Europe, and investing in centers in India, Pakistan, and Slovakia. The company plans to open three global "Centers of Excellence" in these countries, employing nearly 200 people by the end of 2023. Furthermore, Science 37 is focusing on its Metasite offering, a virtual clinical trial site for drug developers and contract research organizations, to strengthen and scale its operations and accelerate the path to profitability.
The healthcare industry is constantly evolving, and Science 37's layoffs may contribute to shifts in the sector. As the company reduces its workforce in the U.S. and Europe and expands in Asia, it could influence other organizations to follow suit, seeking cost savings and operational efficiencies in emerging markets. Additionally, Science 37's focus on its Metasite offering, a virtual clinical trial site, may encourage further adoption of virtual and remote clinical trials within the industry. This could lead to increased competition and innovation in the virtual trial space, ultimately benefiting drug developers and contract research organizations by providing more efficient and cost-effective solutions for clinical trials.
Science 37's layoffs aimed to reduce expenses and shift resources to cheaper markets, generating $24 million in annual gross cash savings. The company plans to achieve cash flow positivity by 2024, focusing on its Metasite offering and expanding in Asia. These developments may influence other organizations to seek cost savings in emerging markets and adopt virtual clinical trials. The company's future actions could further impact the healthcare industry, driving innovation and competition in the virtual trial space.
