Updated with Fred Hutch confirmation and additional details.
Seattle’s Fred Hutchinson Cancer Research Center is cutting more than 70 jobs, about 2% of its workforce of more than 3,000 people, GeekWire has learned.
In internal messages about the job cuts, Fred Hutch officials cite the impact of the economic downturn on the research institution’s budget. The layoffs are in non-scientific positions, reducing the implications for its core research initiatives.
In a statement Tuesday morning, following this report, Fred Hutch confirmed that it is making 76 layoffs from its South Lake Union campus, and also eliminating 81 open positions.
“The layoffs come after a series of cost-cutting measures implemented since March,” the statement says. “These latest steps are intended to reduce a projected revenue shortfall of nearly $50 million over the next 12 months due to increased volatility in variable revenue sources including philanthropy and investment income. Although the percentage of impacted positions is less than 5% of the center’s overall workforce, the layoffs are all from the center’s Administrative Division.”
Those prior cost-cutting initiatives included limiting spending on consultants and vendors, restricting hiring, eliminating salary increases for the upcoming fiscal year, and reducing executive salaries by 5%, Fred Hutch said in the statement. Executives also waived variable compensation representing up to 20% of their 2020 base salaries.
“These are already exceptionally difficult times, and these layoffs add to the pain and deep sense of loss, especially for those colleagues who are leaving us today,” said Dr. Thomas Lynch, the Fred Hutch president, in an email message to employees. (Full message below.)
Fred Hutch reported operating revenues of $714 million in its 2019 fiscal year, 56% of which came from contracts and government grants, 16 percent from gifts and philanthropic grants, and 6 percent from investment income. The 44-year-old organization is ranked first in National Institutes of Health funding among all U.S. independent research centers.
The institution is a life sciences and biotech powerhouse in the Seattle region, spinning off numerous startups and providing the scientific underpinnings for major companies including Adaptive Biotechnologies and Juno Therapeutics.
In addition to Fred Hutch’s core cancer research initiatives, scientists in its Infectious Disease Division have emerged as leaders in the effort to understand, track and reduce the spread of COVID-19 in the midst of the global pandemic.
Lynch, a cancer research veteran, joined Fred Hutch five months ago as its new president and director. Fred Hutch last week named a new board chair and made other changes in its board of trustees. The changes coincide with the June 30 end of the institution’s 2020 fiscal year.
Separately, Fred Hutch laid off 14 people as part of a broader restructuring of its internal data science initiatives in March, but said that decision was in the works for a few months and was unrelated to the economic fallout from the COVID-19 crisis.
The layoffs being announced today are on a scale similar to the cuts made by Fred Hutch in April 2009, as the economic impact of the recession took hold.
Here is the full text of Lynch’s message to Fred Hutch employees.
Today marks a difficult day for our Fred Hutch community.
As you know, Fred Hutch is not immune to the COVID-19 pandemic’s financial impacts. Despite our centerwide efforts to reduce expenses, we were not able to fully cover a projected revenue shortfall of nearly $50 million. In order to sustain our pursuit of cures for cancer and viral diseases, today we notified 76 employees that they are being laid off. We are also eliminating 81 open positions.
These are already exceptionally difficult times, and these layoffs add to the pain and deep sense of loss, especially for those colleagues who are leaving us today.
Although the effects of these steps will be felt by everyone in the organization, the layoffs and eliminated positions are all in our Administrative Division. All the affected roles are funded not by direct grant support but by other revenue streams, including Facilities & Administrative revenue from grants, philanthropy and investment income. These revenue sources are being affected by the economic downturn related to COVID-19, and they remain uncertain as long as the volatility continues.
We made the extremely difficult decision to implement layoffs only after enacting a series of other cost-saving measures and thoroughly evaluating a range of additional options. Our approach to budget planning throughout this pandemic has centered on supporting Fred Hutch research using the resources we have in the most efficient way. The steps we have taken, including today’s reduction in staffing, are all aimed at preserving the strength of our science and our ability to fulfill our mission far into the future.
Every employee laid off today will receive a transition package that includes severance pay, health benefit continuation for those who use our benefits, and a number of other services including job-search support. We will also ensure that any qualified and affected employees who are interested in roles that open at the center in the future are interviewed for those positions.
To those who are leaving, we are grateful for your passion, dedication, and everything you have contributed to our Hutch community and our mission. You are our colleagues and friends, and you will be missed.
In my short time here, I’ve been struck by the deep care and concern Hutch employees have for one another. I know you will continue to support each other.
As difficult as these decisions are, our intent is to ensure that the Hutch rebounds swiftly when the economic situation improves, and we will continue to advance the center’s lifesaving work even as we confront the losses and navigate the challenges presented by this global crisis.
I remain committed to keeping you informed and will devote our town hall this afternoon to discussing today’s news and taking your questions.
Thank you again for your compassion, hard work and commitment to the Hutch’s science, our community and our mission.