Ameridose LLC, an affiliate of the New England Compounding Center at the heart of the deadly U.S. meningitis outbreak, is laying off about 90 percent of its workforce.
The action follows a suspension of its operations amid concerns about the sterility of its drug-mixing practices.
The Westborough, Massachusetts-based company notified employees in a letter on Friday that while it expects to resume operations at some point, "we have now determined that because of the continued inspection by state and federal authorities it may be necessary to resume operations at a reduced level."
Ameridose was closed on October 10 to allow state and federal investigators to inspect its facilities. The company is scheduled to remain closed until November 19. Ameridose has the same owners as NECC, which distributed a tainted steroid that has been linked with 31 deaths.
About 650 employees at Ameridose will be affected, as well as 140 employees at Medical Sales Management, a company which provides sales, technology and human resources support to Ameridose and is owned by the same people. About 200 of the layoffs will be permanent, according to the company.
The layoffs will become effective as of November 30.
"In our current circumstances, our business prospects are very difficult to predict, and it is our hope that your layoff will be temporary and that you will be brought back to work," the letter from the company's human resources director said. "It is important that you know we are working diligently and cooperatively with our regulators to address any issues they have raised, and with the goal of resuming Ameridose's operations as soon as possible."