Salix Pharmaceuticals is laying off 258 people at its headquarters in North Raleigh, the company announced in a letter filed Wednesday with the N.C. Department of Commerce.
The letter was sent on the same day that the Canadian drugmaker Valeant Pharmaceuticals completed its $11.1 billion acquisition of the company. Montreal-based Valeant is laying off the vast majority of the company’s workforce in Raleigh, where Salix once had about 300 of its 900 employees.
Valeant, which has built itself into a $68 billion company through a series of acquisitions, typically slashes research and development spending after acquiring a company. The company has become a favorite among Wall Street investors for its lean business model.
It was expected that Valeant would likely retain much of Salix’s sales force since Salix focuses on drugs that treat gastrointestinal ailments – an area that Valeant does not have a strong presence in.
But Salix’s Raleigh workforce performed many functions, including finance, human resources, marketing and other functions, that Valeant deemed to be redundant. The positions targeted for elimination range from administrative assistants to senior vice presidents.
“The company has instituted this layoff in connection with synergies that will be achieved as a result of a recent acquisition of the company by Valeant Pharmaceuticals International,” the company wrote in its letter.
The layoffs began Wednesday and are expected to be completed by October 30.
Valeant was one of several pharmaceutical companies that expressed interest in acquiring Salix over the past 9 months. The jockeying among would-be buyers of the company drove up Salix’s stock, with Valeant eventually paying $173 per share in an all-cash deal.
Salix is the secondly publicly-traded Triangle company to be acquired in recent months, and both deals resulted in immediate layoffs here.
In March, The Pantry, which had its headquarters in Cary, began laying of 250 workers in Cary and Sanford on the same day that its merger with Canadian convenience store chain Alimentation Couche-Tard closed.
The layoffs are to be completed over the next 18 months.