Taconic lays off workers as research business changes

HUDSON–Taconic, the breeder and marketer of state-of-the-art laboratory rodents, has laid off 5% of its global workforce and that has taken a toll on jobs here in Columbia County where, 60% of all its employees work. The company is the second largest employer in the county.

The company, formerly known as Taconic Farms, has its headquarters in Hudson and has been a major presence in Germantown for decades. It also has facilities in East Greenbush, the Midwest and overseas.

A source close to the company’s Germantown facility who requested to remain anonymous, said workers were summoned last Thursday, January 13, one by one, told they were being laid off, then escorted as they collected their personal belongings from their lockers and left the property. In cases where a couple both worked at Taconic and only one was laid off, the worker who remained had to drive his or her laid off partner home, then return to work. The jobs lost reportedly included benefits.

The company would not say specifically how many of the 49 jobs lost worldwide were positions in Columbia County, but some observers have estimated that around 30 were lost in the county and the East Greenbush site. As many as 25 jobs may have been lost in Germantown from different divisions.

In a phone interview Monday, January 17, Kevin Leak, senior vice president in charge of client relations for Taconic, said the layoffs were the result of the overall slowdown of the economy, changes in the pharmaceutical industry where mergers and the expiration of patents have led to cuts in research, and development and changes in the type and number of rodents now sought by scientists. Scientific research and drug testing in the United States is financed by the pharmaceutical industry and that makes them the biggest clients of lab animals.

Changes in research practices have also reduced the need for rodents. Scientists now prefer to use fewer more intensively engineered transgenic mice. Innovations in genetic science in recent years have enabled firms like Taconic to fine-tune mouse DNA for individual testing protocols in the fields of obesity, Alzheimer’s, and cancer research. The use of experiment-specific mice can save research dollars, since a mouse that develops a tumor in just a few weeks rather than a year can produce experimental results that much faster.

“As mice become more predictably reliable, researchers need 40 or 50 when they had needed 100,” said Mr. Leak.

Some mice come equipped with genetic knock outs, a term that describes the capacity to breed mice that have a gene for a disease turned on or off, depending on the need of the research project. Many mice come with identification micro chips implanted and have ports installed in their shoulders for easy drug administration. Mice are considered ideal for scientific experiments because they share so many genes with humans. In addition to selling mice, Taconic also conducts experiments at its sites for clients.

The price of engineered mice differs dramatically from ordinary lab mice, said Mr. Leak. A generic lab mouse sells for around $10, while a high-tech mouse containing human genes implanted in its DNA could sell for as much as $400. This change may explain why orders for rodents are down but company profits may not be.

Taconic is a family owned, global company that does not release its financial information to the public. The company was founded in 1952 by Robert Phelan, who sensed a growing need for laboratory test animals and started raising them at home. Today the company is owned by Mr. Phelan’s sons, Joe Phelan, the chairman of the board, Sam Phelan, the board vice chairman and Dick Phelan, secretary of the board. In 2009, for the first time, a non-family member, Todd Little, became chief executive officer of the company, succeeding Sam Phelan in the position.

The company operates seven breeding facilities and three service laboratories in the United States and Europe, and maintains distribution operations in Japan, Korea and Singapore. Until the economic slowdown began in 2009, the company had experienced rapid growth, expanding by about 15% annually. Now its growth is estimated to be half that rate.

Roy Brown, Germantown supervisor and chairman of the Columbia County Board of Supervisors, expressed sympathy with those who were laid off. “It’s tough to see businesses continuing to lay people off when we’re trying to grow jobs and businesses here,” he said in a phone conversation Tuesday.

“They need to adjust their business in response to the downturn in the pharmaceutical industry,” said Ken Flood, head of the county Department of Economic Development. “Hopefully that’s it for now, and the drug companies will up their research soon.”

“We are supporting each departing employee in every way possible,” Mr. Little, the Taconic  CEO, said in a press release. The company used Space 360 on Warren Street in Hudson last Friday, the day after the layoffs, for a full day of post-layoff support services.  

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