Following its recent management shake-up, US-based contract research organisation (CRO) PPD Inc is laying off a total of 270 staff in North America, citing lower than expected demand for its services.

In April, PPD tempered its financial guidance for 2009 after net revenues for the first quarter dropped by 7% year on year to US$364.9 million. The company blamed “unexpected cancellation levels, significant rescheduling of existing backlog and lower-than-expected authorisations”.

Fewer than 80 of the redundancies have fallen at PPD’s headquarters in Wilmington, North Carolina, with other lay-offs hitting facilities in Research Triangle Park, North Carolina and Austin, Texas.

"While PPD has a strong backlog of global business ... demand for our services in North America has been lower than we expected," the company said. "Over the past year, we have taken steps to cut unnecessary expenses, drive efficiencies and reorganise in ways to best address the needs of our clients. Despite these efforts, growth in our North American business has not resumed, leaving us with excess capacity in this region."

In addition to its global backlog, PPD has more than $650 million in cash/cash equivalents and is debt-free, it noted. "We are the only CRO that pays a dividend; and we have ample resources even after paying a dividend to fund our operations and future growth prospects."

While the current market is "challenging", PPD remains "very optimistic about the long-term prospects for the CRO industry as a whole and our company in particular", it stressed, adding that no further reductions in staff are planned.

PPD has around 10,500 employees in total worldwide, with offices in 38 countries. About 5,800 of those staff work in North America.