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Old Lyme — Pfizer Inc.'s local pullback continues to have ripple effects, as word spread Tuesday that INC Research LLC is closing its office at 55 Hatchetts Hill Road, laying off 66 of the 81 workers there.
According to a Worker Adjustment and Retraining Notification posted this week on the state Department of Labor's website, employees at the contract research organization — formerly Kendle International Inc. — will be laid off between May 23 and July 31.
"All employees at the location will be affected," according to a letter from Karen M. Wall, general counsel for INC Research, based in Raleigh, N.C.
It is unclear from Wall's letter what will happen to the 15 workers not affected by a layoff, but one INC employee noted that some of the Old Lyme-based employees likely work from home. A message left with Wall was not returned, and calls to INC public relations personnel also elicited no response.
John Beauregard, executive director of the Eastern Connecticut Workforce Investment Board, tied the layoffs at INC to the "multiplier effect" that occurs when large businesses like Pfizer announce major layoffs. When cutbacks occur among major employers, he said, support-type industries are sure to follow suit.
Pfizer announced last year that it would be laying off 1,100 people at its Groton research campus. It previously had sold the Pfizer Global Research & Development Center in New London to Electric Boat for $55 million.
Beauregard noted that the region has hit an employment low in recent months that makes it appear as if eastern Connecticut is going through the type of double-dip recession that the United States as a whole apparently avoided.
"The last six to seven months have been the most troubling," he said.
The layoffs at INC will commence almost exactly a year after the company announced its intention to buy Kendle for $232 million, forming one of the nation's largest contract research organizations. These organizations do scientific work outsourced by pharmaceutical, biotech and other similar companies.
Kendle, which had run clinical programs in more than 100 countries and had offices throughout the United States, focused on providing early- to late-stage drug-trial expertise to pharmaceutical companies such as Pfizer Inc. But Pfizer last year announced that in the future, it primarily would use only two research firms: Boston-based PAREXEL International Corp. and Dublin-based ICON plc.
Pfizer said the two-partner model was meant to simplify the company's processes and increase project accountability and quality management. Not coincidentally, analysts said, it also would save the company large amounts of money, as Pfizer chief executive Ian Read had promised investors last year when he unveiled planned annual research cuts totaling up to $3 billion.
At the time the CRO partnership agreements were announced in May of last year, Pfizer said it would take up to two years to implement the research changes.
The changes were necessitated by Pfizer's global downsizing, which by this summer is expected to have reduced the pharmaceutical giant's direct employees in the region to 3,500 — 1,100 fewer than it had employed a year and a half earlier. Some Pfizer researchers were moved to a site in Cambridge, Mass., but many of the jobs were eliminated in anticipation of the company's loss of patent exclusivity on the $10 billion cholesterol treatment Lipitor.