An unexpected essential company now lays off all employees after undergoing multiple rounds of job cuts in the past two years.
Cue Health will lay off the remainder of its staff this week, according to a filing with California’s Employment Development Department.
The layoffs, first reported by the The San Diego Union-Tribune, include all of Cue’s U.S. employees and company leadership.
Cue has undergone multiple rounds of layoffs in the past two years, announcing plans to cut nearly half of its staff earlier this month.
The San Diego-based test maker had one product cleared by the Food and Drug Administration, a COVID-19 test, but the agency recently warned people to stop using it because of changes made to the test.
Cue, which built its business around a portable, molecular testing platform, grew quickly during the COVID-19 pandemic.
The company struck agreements with Google and the NBA to provide COVID tests for both organizations and raised $200 million in an initial public offering in 2021.
It also raised hundreds of millions of dollars through contracts with the Departments of Defense and Health and Human Services to provide COVID tests.
Cue’s fortunes changed when federal funding dried up and demand for COVID tests plummeted.
Cue received de novo clearance for its COVID test in 2023, but it remained the company’s only FDA-cleared product.
By the end of 2023, Cue brought in just $70.9 million in revenue, down from $483.5 million the prior year.
The company also began shedding employees through several rounds of cuts, including a 230-person layoff announced earlier this month and more than 200 people across two layoffs in January.
Cue’s sole product came under fire this month when the FDA sent a warning letter to the company regarding unauthorized changes to its COVID test and instructed people to not use the diagnostic.
Cue had initially planned a layoff of 190 U.S. employees effective July 1 and one additional employee on July 10, according to a California Worker Adjustment and Retraining Notification filing reviewed by MedTech Dive.
The company sent an update on Monday to the state saying those people’s employment will end on May 24, along with all remaining U.S. employees, including company leadership.
The decision was made by the company’s board “due to the fluid nature of this situation.”
CEO Ayub Khattak and CFO Aasim Javed resigned earlier this year.
For more layoff news and updates like this, opt-in for push notifications.
Also Read: Retirees Will Now Receive More Money For Social Security
Other Economy News Today
Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.
First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.
Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.
That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.
The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.
US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.
Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.
Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.
“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.
The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.
While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”
Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
For more news and updates like this, opt-in for push notifications.
Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia
Market News Published Daily 📰
Don’t forget to opt-in for push notifications so you don’t miss a single article!
Also, thank you to all of our blog sponsors.
This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.
Scroll below to view my stock purchases this month!
You can also follow me on X (Twitter), Instagram, Facebook, or LinkedIn for daily news and updates on your favorite stories.
Frank Nez’s Stock Portfolio
Wondering which stocks Frank Nez is holding? Which stocks is Frank Nez buying?
Frank Nez is now sharing his exclusive and personal stock portfolio with readers, only on the Patreon.
11/16/2023 – Today I invested $1,000 in two different stocks for a brand new stock dividend portfolio I am creating for 2024.
Recommended For You ✨
About The Author
Leave your thoughts below.
For more news and updates like this, opt-in for push notifications.