FARGO -- Hundreds of PRACS Institute employees here were laid off Wednesday when the company unexpectedly announced it was shutting down.
Employees said they were notified that the company would shut down Wednesday afternoon.
“(I am) kind of shocked, I am blown away. (We) heard nothing at all. We were told thank you for hanging with us through this tough time,” said PRACS employee Gabby Kedrowski.
According to the Fargo Moorhead West Fargo Chamber of Commerce, PRACS is one of the metro area’s largest employers with 316 employees.
PRACS conducted research for the drug, dermatology and cosmetic industries through inpatient and outpatient studies.
Research participants could make upward of $1,000 for qualifying and finishing studies.
James Carlson, founder of the biomedical research company and current chief executive officer of PRACS Institute, could not be reached for comment Wednesday evening.
News of the layoffs began circulating outside the massive building on Amber Valley Parkway via social media Wednesday afternoon. Fargo employees reported that they were told to stop by the building today by the end of the business day to collect their belongings.
Carlson founded PRACS Institute in 1983, then sold it in 2006. PRACS was merged with two other firms to form Cary, N.C.- based Cetero Research. Cetero operated out of seven locations, including Fargo.
The company encountered significant financial problems after it was revealed that chemists in its lab in Houston falsified pay records to collect fatter paychecks. Ultimately the Food and Drug Administration concluded that tests at the Houston lab were valid, but the lengthy investigation and adverse publicity proved damaging to Cetero.
Last July, a Chicago-based investment company bought Cetero for $80 million and rehired Carlson as chief executive officer.
Fargo was named its headquarters, with labs in St. Louis and Toronto.
As of March 2012, Cetero had about 1,140 total employees, about 400 of whom were based in the 250,000-square-foot clinical pharmacology facility in Fargo, where 544 beds were available for drug testing subjects.
About 11 study participants at the St. Louis location told KMOV-TV that PRACS still owed them $1,000 for studies they had participated in.
A sign on the door of the St. Charles, Mo., location outside St. Louis on Wednesday simply says, “All Studies are Cancelled.”
No signs were posted at the Fargo location as of Wednesday evening. No notice of closing is posted on the PRACS website.
Brian Lund of Dilworth was taking part in a Fargo-based study to raise money for a family vacation.
Lund said he was now out $1,300.
“Now we are left scrambling figuring out how to pay for this trip,” he said.
Emails to the PRACS spokesperson went unanswered Wednesday.
The last piece of news posted on the company’s website is dated March 11, 2013, and announces an “enhancement” of services. The news release announced the reopening of a 15,000-square-foot lab that is part of the Fargo facility and said the Toronto facility has increased capacity for development by more than 20 percent.
Article written by Wendy Reuer of the Forum News Service
WDAY-TV contributed to this report.