Illumina lowered its annual financial forecast and says it plans to cut about $100 million in costs after China banned imports of its gene sequencers last week.
The San Diego maker of gene-sequencing machines and chemicals — technology that allows scientists to analyze DNA to understand diseases and develop drugs — said Monday that it will continue to invest in its growth strategy, while also adjusting to the latest developments in China.
Illumina is lowering its earnings per share guidance — a financial metric that helps gauge a company’s outlook — to $4.50. Prior to the Chinese import ban, Illumina told investors and analysts that it expected diluted earnings per share in the range of $4.50 to $4.65.
The company is also trying to curb the financial impact of China’s ban through an “incremental approximately $100 million cost reduction program” during the 2025 fiscal year. Illumina said the cost saving plan includes “optimizing stock-based compensation and non-labor spending and accelerating certain productivity measures.”
It’s unclear how this program will directly impact its workforce, most of which is based in San Diego at its headquarters.
The last time Illumina announced a $100 million cost-savings plan was in 2023, where the company trimmed expenses through layoffs and offloading real estate. Illumina offloaded its i3 campus in San Diego and part of its office in Foster City.
“We remain focused on achieving high-single-digit revenue growth by 2027, while expanding our margins,” said Jacob Thaysen, CEO of Illumina in the announcement. “We are confident in the large global market opportunity for our solutions, the strength of our business, and our strategy to continue to lead innovation in genomics and multiomics in support of our customers.”
In an exclusive interview with the Wall Street Journal, Illumina’s Chief Financial Officer Ankur Dhingra said Monday that the company is in contact with both the United States and Chinese governments as they navigate the situation.
“China is kind of signaling control, but we also understand this is kind of happening at the same time as the tariff negotiations are happening, too, so it may not entirely be about Illumina alone,” Dhingra said to the Wall Street Journal.
The publication also reported that while Illumina is banned from exporting its gene-sequencing machines, the company continues to operate “a facility in China that assembles its less advanced machines.” It also reports that Illumina will continue exporting chemicals and other services to its customers in China.
The San Diego company had just under 9,000 employees worldwide and recorded about $4.37 billion in total revenue during the 2024 fiscal year. Most of its workers are based in the Americas and 300 employees are based in the greater China region, according to Illumina’s annual report.
As for the impact this will have on Illumina’s broader business, analysts have noted that China revenue has already been on the decline in recent years. China accounts for roughly 7% of Illumina’s total annual revenue, or about $300 million.
China’s Ministry of Commerce imposed an import ban on Illumina’s gene-sequencers citing the defense of its national security and economic interests. This was one month after China placed the local company on its “unreliable entities list,” which targeted certain U.S. firms with business sanctions.
It’s all part of the country’s broader retaliation and economic push back to President Donald Trump’s escalating trade war. In recent months, Trump has raised tariffs on Chinese-made goods by 20%.
Illumina’s stock closed Wednesday at $84.20 per share, down 32 cents. Its stock value is down about 36% year to date, as the company has also been trying to rebound from its failed $7.1 billion acquisition of Grail.
