Biopharma Layoffs Surge in 2025 Amid Strategic Restructuring

Pharmaceutical Industry Layoffs Continue Amid Strategic Shifts and Pipeline Reprioritization

The pharmaceutical and biotech sectors continue to face significant headwinds in 2025, with numerous companies announcing workforce reductions and strategic realignments. These moves come as firms grapple with challenging market conditions, pipeline setbacks, and the need to allocate resources more efficiently.

Major Players Implement Cost-Cutting Measures

Several industry giants have recently disclosed plans to trim their workforces. Merck revealed it could let go of about 6,000 employees as part of a multiyear process, affecting around 8% of its global workforce. This announcement is part of the company's broader $3 billion cost-cutting initiative announced during its second-quarter earnings report.

Bristol Myers Squibb (BMS) is also continuing its strategic reorganization, with an additional $2 billion in savings planned through 2027. This comes on top of an ongoing program that had targeted $1.5 billion in cost cuts by the end of 2025. The dramatic upheaval of the BMS business has led to layoffs and program discontinuations.

Novartis announced it is reducing its U.S. workforce by 427 employees, according to a recent WARN notice. The layoffs will take place from June 13 to October 24 this year and will affect staff at the pharma's U.S. headquarters in East Hanover, New Jersey.

Biotech Firms Face Tough Decisions

Smaller biotech companies are not immune to the industry's challenges. Atara Biotherapeutics disclosed plans to cut about 50% of its workforce following the FDA's rejection of its T cell therapy for a transplant-related blood cancer. The layoffs are expected to be mostly complete by June.

Intellia Therapeutics announced a reorganization program that includes reducing its workforce by around 27%. The company will focus its efforts and resources on high-value programs, specifically its investigational gene editors NTLA-2002 for hereditary angioedema and nexiguran ziclumeran (nex-z) for transthyretin amyloidosis.

CytomX Therapeutics revealed plans to cut about 40% of its employees to direct capital resources to its clinical programs and create flexibility in its cost structure. The exact number of people affected is 46, likely leaving the biotech with fewer than 70 employees.

Strategic Shifts and Pipeline Reprioritization

Many companies are using workforce reductions as part of broader strategic shifts. Galapagos announced plans to split into two entities by mid-2025 and cut 40% of its workforce, affecting about 300 employees across its European operations. The reorganization will result in the closure of its site in France and decreased staff in Belgium.

IGM Biosciences is cutting 73% of its workforce and stopping development of two autoimmune drug candidates. The layoffs will affect 100 employees effective March 10, leaving the business with 37 employees.

Passage Bio plans to slash its workforce by about 55% to help extend its cash runway into the first quarter of 2027. The clinical-stage genetic medicines company expects to incur associated severance and exit costs of about $2 million primarily during the second quarter.

As these developments unfold, the pharmaceutical industry continues to navigate a complex landscape of scientific challenges, regulatory hurdles, and financial pressures. The ongoing wave of layoffs and strategic realignments underscores the sector's need to adapt to evolving market conditions while maintaining focus on innovative drug development and commercialization efforts.