San Diego biotech company Q Health, which has grown during the pandemic through major funding and partnerships for rapid COVID-19 testing, announced Wednesday that it will cut costs and expand its core The company announced it would lay off half of its employees in order to focus on technology.
The diagnostic test maker announced in a regulatory filing that it will lay off 230 employees, or about 49% of its workforce, including several executives and manufacturing employees.
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These job cuts followed a change in Q's management team. The company's long-serving CEO was replaced and its chief financial officer resigned. Q's board last month also began a strategic review of future options, including the possibility of selling the company.
This is the third time this year that Q has cut its workforce. The company cut its workforce by 388 people in January, and an additional 30%, or 245 jobs. After this week's layoffs, Kew will have about 250 employees.
In the early days of the pandemic, Cue formed large-scale partnerships to provide rapid COVID-19 tests to large companies such as the NBA and Google. The biotech company has grown its workforce from 99 in January 2020 to 1,515 full-time employees by the end of 2022.
But the company has been struggling financially since ubiquitous demand for coronavirus tests has shrunk and government funding has dried up. Q's board of directors has implemented multiple layoffs and leadership changes in response to declining revenues and backlash from investors.
In March, Cue co-founder and CEO Ayub Khattak stepped down from the company's leadership following a strategic review by the company's board of directors. Mr. Khattak remained on the board of directors and was replaced by Clint Sever, co-founder and chief product officer of Cue.
Additionally, the company's chief financial officer, Aasim Javed, resigned on April 19, according to an SEC filing. Javed's resignation is effective May 13, and he will be replaced by Randall Pollard, Cue's chief accounting officer.
Khattak and Sever founded the company in 2010 to integrate high technology into healthcare. In September 2021, Q launched a roughly $200 million IPO, making it a windfall among startups that went public that year.
Prior to the pandemic, Cue Health had no FDA-approved commercial products on the market.
Q's COVID-19 test, the first home coronavirus test to receive full routine use authorization, and its mpox test, formerly known as Monkeypox, are the only commercially available This is a commonly used diagnostic test. A recent application for an RSV molecular test was rejected by the US Food and Drug Administration.
Q has been working to expand its diagnostic test menu and health technology platform following the success of its primary source of revenue, molecular testing for COVID-19. It offers a variety of home tests, including sexual health, heart health, and metabolic tests, where samples are sent to a lab and results are sent directly to users' mobile phones.
Cue has also enabled its smartphone application to connect patients to medication and telehealth services.
In an emailed statement to the Union-Tribune, a company spokesperson said that in addition to the job cuts, Q is shifting its focus away from “non-testing-related products and services.” The company also said it does not plan any additional job cuts.
“In close collaboration with Cue's Board of Directors and strategic advisors, the company has decided to refocus its business on the development and deployment of its core technology product, the Cue Health Monitoring System, and its diagnostic products specifically into the point-of-care market. ” the company announced on Thursday. “In line with this strategy, Cue has significantly reduced or completely removed features that do not directly support this strategy.”
The layoffs will take effect July 1, according to a letter filed by Kew with the state under the Worker Adjustment and Retraining Notification Act. Kew reported in his notice that the local layoffs will not result in the closure of the eight affected facilities in Vista and San Diego.
According to the WARN notice, Kew plans to cut 114 jobs in San Diego, 41 remote workers in California, and 34 out-of-state workers, but the notice only covers Kew job losses in the U.S. .
Local layoffs hit all levels of the organization, including many machine operators, engineers, managers and vice presidents. The company also fired its chief marketing officer, chief software architect, and chief technology officer.
Q Health will release its first quarter earnings report on Monday. However, the company typically does not hold conference calls where executives announce results and take questions from investors.
