In an SEC filing, Zymergen revealed it was cutting 80 more jobs and parting with Zach Serber, its co-founder and chief scientific officer.
In a Securities and Exchange Commission report filed Thursday, Zymergen revealed it is cutting 80 more jobs and parting ways with Zach Serber, its co-founder and chief scientific officer, on Sept. 22.
This most recent round of job cuts follows the company’s announcement it was cutting 80 jobs in July. The Emeryville, CA biotech expects to pay around $3.8 million in cash for employee severance. This brings its termination pay total to approximately $7.5 million since Zymergen started a fresh round of lay-offs last month.
The company also expects to incur restructuring costs and stock-based compensation related to the headcount reduction, though the exact amounts for these have yet to be evaluated.
Serber’s delayed departure is to allow a smooth turnover of his responsibilities. Serber will remain on Zymergen’s board of directors and will be entitled to a lump-sum payment, continued company healthcare coverage and his remaining equity.
Zymergen’s restructuring comes soon after Massachusetts-based Ginkgo Bioworks announced it was acquiring Zymergen in an approximately $300-million deal. Under the terms of the transaction, Zymergen stockholders will get 0.9179 Ginkgo shares for each Zymergen share they have, representing a 5.25% ownership of Ginkgo.
The agreement, expected to close early next year, has been unanimously approved by the boards of directors of both firms. Zymergen is Ginkgo’s largest purchase to date.
At the time of its July round of job cuts, Zymergen had already shrunk to around half its size compared to a year before.
How Zymergen Got Here
Though it was founded in 2013, Zymergen first started making waves in the industry in June 2015, when it began revealing details about its business and technology. The company’s approach of using microbes to produce high-value chemicals and other industrially-relevant compounds earned it $44 million in Series A funding.
“Unlike the prior generations of companies in this field, Zymergen is pursuing a repeatable, technology-focused approach with controllable costs and fast delivery timelines,” Matt Ocko, managing partner at Data Collective, the group that led the funding round, said at the time.
Zymergen banked on robotic automation, machine learning and sophisticated analytics to achieve a high level of reliability for its microbe-based biomanufacturing platform.
In April 2021, Zymergen launched its initial public offering, which it closed in the same month, yielding a gross profit of approximately $575 million. At its peak, the company had a value of close to $5 billion.
But three months after its IPO, Zymergen encountered issues in its commercial product pipeline that pushed its delivery timeline back, and essentially rendered its 2021 and 2022 product revenue projections “immaterial.” This news deleted 68% off of the company’s value at the time, with its per-share price dropping from $31 to $11.7.
Zymergen has had trouble regaining its footing since then. In November 2021, the company underwent its first round of restructuring, laying off some 220 employees in hopes of extending its runway until mid-2023. In the fourth quarter of that year, the company posted total earnings of $3 million, which was dwarfed by more than $80 million in expenses. The company posted a net loss of $78.1 million that quarter and of $361.8 million throughout 2021.
