Connecticut Demands State Money Back from Alexion as It Moves Jobs to Boston
U.S. drugmaker Alexion Pharmaceuticals, Inc. has announced plans to slash its global workforce by 20% in a cost-saving effort. As part of these plans, the company is moving its headquarters to Boston by mid-2018. This news disappoints Connecticut state officials, who awarded financial incentives to the company for it to stay in New Haven, Connecticut.
The company is also streamlining operations at a number of its sites, closing one manufacturing site in Rhode Island, and shuttering some regional offices.
Alexion had a global workforce of about 3,100 employees at the end of 2016. The downsizing initiative will likely affect more than 600 employees, with a majority of the layoffs being within the United States.
The drugmaker expects these restructuring efforts to annually save about $270.0 million by 2019. The company says it will be reinvesting about $100.0 million of these savings every year into research and development activities.
The restructuring will cost the company about $340.0 million to $440.0 million, most of which will be spent during this fiscal year.
Alexion, which manufactures drugs for rare diseases, says its plan to move to Boston will help drive “innovation and future growth” for the company. The move comes as bad news for New Haven, where hundreds employed by Alexion now face job uncertainty. The company has operated in the city for 25 years.
The drugmaker was awarded incentives by the Connecticut government to stay within the state and create employment opportunities for locals. The state is now demanding that incentive money back. Connecticut officials have asked Alexion to return $20.0 million in loans and $6.0 million in grant money.
State Commissioner of Economic Development Catherine Smith, said that Alexion’s decision to move its headquarters to Boston is “very disappointing, especially in light of how supportive the state has been to the company over the years as it has grown into what it is today.”
Nonetheless, the company has said that it will be opening a research and development center in New Haven despite moving its headquarters to Boston.
“Alexion Announces Restructuring To Advance Corporate Strategy,” Alexion Pharmaceuticals, Inc., September 12, 2017.
“Connecticut Demands $26 Million Back After Alexion Announces Move to Boston,” Hartford Courant, September 12, 2017.