CSL to axe up to 3,000 employees and spin off vaccine arm; shares tumble

By John Biju and Byron Kaye

(Reuters) -Australian biotech CSL, the country’s fourth-largest company, said on Tuesday it would spin off its vaccine division and shed about 3,000 employees as it reels from “unprecedented volatility,” sending its shares tumbling.

The company, which makes most of its profit selling blood plasma treatments for rare illnesses, met analyst forecasts with a 14% increase in annual profit but said it was carving off its vaccine unit where profit dipped due to what its CEO called “highly irrational” softness in the U.S.

For its main earner, collecting blood from the public mostly in the U.S. and converting it to medical treatments, CSL reported slower-than-expected profit growth. The company said it closed 22 collection centres this month and would “consolidate” its research and development, all culminating in a reduction of up to 15% of workers outside its U.S. plasma unit.

“Our business has grown this year despite an unprecedented level of challenge and volatility in our external operating environment,” CEO Paul McKenzie said in a statement.

The company didn’t provide a valuation for the demerger, which it expects to complete in early 2026, but McKenzie said the cost-cutting would “further reshape and simplify the business (and) provide a platform to renew CSL’s focus on our core strengths.”

On a call with analysts, McKenzie made only a passing reference to hefty tariffs on pharmaceutical imports threatened by U.S. President Donald Trump, saying he didn’t believe they would apply to CSL because its core ingredient was sourced inside the U.S.

For the company’s non-blood plasma products, “the active pharmaceutical ingredient is sourced in the U.S. as well”, McKenzie added. “For the other parts of the organisation, we will look at our supply chain and where the products come from”.

CSL shares were down 15% by afternoon and were headed toward their worst session, dragging the broader index down 0.7%, as analysts fretted about the implications of the restructure.

“Cutting back staff is normally a positive thing but I suspect that it will have an impact on earnings growth and that’s what the market seems to be focused on at the moment,” said Craig Sidney, a senior investment advisor at Shaw and Partners.

The company’s future earnings guidance, which was just short of previous expectations, may also hurt the stock, Craig Wong-Pa, analyst at RBC Capital Markets, said.

The former government laboratory forecast underlying annual earnings between $3.45 billion and $3.55 billion in the 2026 financial year, just short of a Visible Alpha consensus of $3.56 billion.

CSL said the restructure would save it up to $550 million a year within three years, although it would incur a one-off pre-tax charge of up to $770 million in the current financial year.

The company said it would also buy back A$750 million ($486.68 million) of shares this financial year.

It declared a final dividend of $1.62 per share, up from $1.45 per share declared a year ago.

($1 = 1.5411 Australian dollars)

(Reporting by Byron Kaye and John Biju, Sameer Manekar and Rishav Chatterjee in Bengaluru; Editing by Vijay Kishore, Edwina Gibbs and Shri Navaratnam)