HDL slashes 15 percent of its staff

HDL, headquartered on 5th Street, is downsizing its workforce.

HDL, headquartered on 5th Street, is downsizing its workforce.

The fallout continues at HDL.

Health Diagnostic Laboratory, a once fast-growing local medical lab company that has recently been part of a federal investigation, announced on Tuesday it has laid off 132 workers who account for 15 percent of its staff.

The cuts are the latest shoe to drop at the downtown firm following a Wall Street Journal report in September that called into question its practice of paying doctors to use its services. Its founding CEO Tonya Mallory left the company abruptly shortly after the report.

Since then, major health insurance company Cigna has filed an $84 million lawsuit against HDL. And the lab company has also said recently it is pulling back on its charitable donations.

In a Tuesday statement about the layoffs, HDL President and CEO Joe McConnell attributed the cuts to a move away from the company’s involvement in “non-core business interests” that took up a significant amount of HDL’s time and resources over recent years.

“The need to reallocate our resources to return to our core mission is what led to the reduction in force,” McConnell said in the statement. “We deeply regret the business necessity that made this reduction in force necessary and we are all mindful that this will pose difficulties and challenges for our former colleagues and their families.”

As it did following Mallory’s departure, the company maintains that these latest departures are not related to the federal scrutiny or any changes and preparations it might be making as the investigation progresses. HDL is one of several lab companies nationwide that is being investigated by the Justice Department.

HDL spokesperson Jeff Kelley reiterated that the reasons for the cuts are “specific to these non-core business interests.” He would not say exactly what those non-core business interests are.

“They were diverting us and really sapping our resources by focusing on these efforts outside our core – our core being our lab,” Kelley said. “It’s very important that we get back to that core, and with this we have done so.”

HDL has built its business selling blood tests that it claims can help doctors predict ailments like heart disease. The company has expanded in recent years into offering employer wellness programs, launching standalone health centers called My HDL Hubs and creating a direct-to-consumer package of its services branded as HDL Engage.

Since its founding in 2008, HDL had grown quickly to 879 total employees before the reduction, Kelley said. It recently moved into a $100 million headquarters in the Virginia Biotechnology Park.

Its headcount is now down to roughly 740, including the elimination of 30 positions in August. The company would not specify what types of employees have been let go.

The cuts were made company-wide, but Kelley declined to say specifically if any management-level employees or executives were included in the reduction. Nor did he say what, if any, severance has been or will be offered to the 132 workers.

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