Troubled KV fires 42% of workers
KV Pharmaceutical Co. continued its purge of employees Wednesday, handing out pink slips to 289 workers — about 42 percent of its work force, company officials confirmed.
Many of the laid-off employees had worked for the Bridgeton-based drug maker for more than 10 years. Some had been with the company for decades, current and former employees said.
The latest cuts reduce the work force from 680 to 391 employees. As recently as 2008, the company employed 1,700 workers.
"Although this type of action is always difficult, we believe it is a necessary step to preserve our capital resources and to re-size our company to be in line with our current expectations of when and how we will be able to return to market," David Van Vliet, the company’s interim chief executive, said in a written statement.
Last month, one of the company’s wholly-owned subsidiaries — Ethex Corp. — pleaded guilty to two felony counts of criminal fraud for failing to report to the U.S. Food and Drug Administration that it was manufacturing oversize tablets that could be harmful to patients. The company agreed to pay $27.6 million in fines and restitution.
Already, KV Pharmaceutical has been virtually idle for months, and its revenue has plummeted.
As part of a consent decree last year, federal regulators have prohibited the company from manufacturing any products, including medications. KV is attempting to have the FDA certify its products again.
Current and former employees said the latest cuts included those who worked on the drug maker’s production lines and in its warehouses. They will receive 60 days’ pay, sources said.
KV Pharmaceutical spokesman Michael Anderson declined to comment on the severance packages for laid-off employees. When asked whether the layoffs were company-wide, he said the cuts were made to "people from different disciplines."
One employee said the events of the past year have shaken the company’s work force.
"They’ve gone to meetings and have heard Van Vliet (say) they were pretty close to starting up again, but they were nowhere near starting up," said a KV employee, who asked not to be identified.
In a recent filing with the Securities and Exchange Commission, the company indicated that it does not expect to resume production until later this year — and there is no guarantee that the FDA will allow the company to go forward.
At least one laid-off employee blamed mismanagement for the layoffs, particularly for the problems involving medicines that were produced at higher dosages than their labels indicated.
"Quality control was told to let things go," said the worker, who asked not to be identified. "Some people tried to stop it; other people just didn’t care."
Filed under: business, management by Finance Boss