Pharmaceutical Industry Faces Wave of Layoffs Amid Strategic Shifts and Market Pressures

The pharmaceutical and biotech sectors are grappling with a surge of workforce reductions as companies reevaluate priorities and respond to financial headwinds. Recent weeks have seen layoff announcements from industry giants and startups alike, signaling ongoing volatility in the life sciences job market.

Major Players Trim Headcount to Cut Costs

Several large pharmaceutical firms have unveiled plans for significant staff cuts. Novartis is reducing its U.S. workforce by 427 employees at its East Hanover, New Jersey headquarters between June and October. This follows the company's December 2024 decision to let go of 330 employees and close sites in Germany and Boston.

Meanwhile, Bristol Myers Squibb continues its strategic reorganization, announcing an additional $2 billion in planned savings through 2027 on top of an ongoing $1.5 billion cost-cutting program. The company is laying off 223 employees in Lawrenceville, New Jersey, bringing total cuts there to 290 this year. BMS CEO Chris Boerner emphasized becoming a "leaner, more efficient company while investing behind growth brands and promising areas of science."

Merck disclosed it could eliminate about 6,000 jobs globally as part of a multiyear process affecting around 8% of its workforce. The cuts are part of Merck's recently announced $3 billion cost-cutting initiative, with savings to be channeled into R&D and supporting launches of up to 20 new products.

Biotech Firms Face Difficult Decisions

Smaller biotech companies are also feeling the pressure to reduce costs and extend cash runways. Intellia Therapeutics announced a 27% workforce reduction, affecting around 142 employees, as it reorganizes to focus on high-value gene editing programs. The company will discontinue development of its NTLA-3001 therapy for alpha-1 antitrypsin deficiency-associated lung disease.

IGM Biosciences revealed plans to cut 73% of its workforce, eliminating 100 jobs, and halt development of two autoimmune drug candidates. The dramatic downsizing leaves the Mountain View, California-based company with just 37 employees as it explores strategic alternatives.

Passage Bio will slash its workforce by about 55%, potentially affecting 32 people and leaving the company with 26 employees. The gene therapy company aims to extend its cash runway into early 2027 as it advances its lead program PBFT02.

Industry-wide Trends and Implications

The wave of layoffs reflects broader challenges facing the pharmaceutical and biotech sectors. Many companies are prioritizing late-stage assets and commercial products while scaling back early research activities. The difficult funding environment for early-stage biotechs is driving some firms to make deep cuts or explore strategic alternatives like mergers or asset sales.

Despite the job losses, areas of growth remain. Several companies emphasized continued investment in priority R&D programs and commercial capabilities for near-term launches. The industry's pipeline of potential new therapies remains robust, though accessing capital to advance early-stage programs has become more challenging.

As 2025 progresses, further workforce reductions may emerge as companies adapt to market pressures and shift strategic priorities. However, areas like cell and gene therapy, oncology, and rare diseases continue to attract investment, potentially offsetting some of the job losses in other segments of the industry.