Biopharma Industry Faces Continued Layoffs Amid Restructuring and Strategic Shifts

The pharmaceutical industry is experiencing a significant wave of layoffs and restructuring as companies grapple with changing market dynamics and strategic priorities. Recent data from Fierce Biotech's Layoff Tracker reveals that the third quarter of 2025 saw 62 layoff rounds, nearly matching the 64 rounds reported in each of the first two quarters. This trend puts 2025 on track to surpass the previous year's total of 192 layoff rounds, with projections suggesting a potential 27% increase by year-end.

Big Pharma Leads Massive Workforce Reductions

Several major pharmaceutical companies have announced substantial job cuts in recent months. Novo Nordisk, known for its diabetes drug Ozempic, plans to lay off 9,000 employees, with more than half of the cuts occurring in Denmark. This move, initiated under new CEO Maziar Mike Doustdar, aims to save approximately $1.3 billion annually by the end of 2026.

Merck & Co. has also unveiled a sweeping cost-cutting initiative, targeting $3 billion in annual savings by the end of 2027. The plan includes eliminating 6,000 jobs, representing 8% of the company's workforce.

Gene Therapy Sector Faces Challenges and Scrutiny

The gene therapy field is encountering significant obstacles, including investor divestment, accessibility issues, and mounting safety concerns. Sarepta Therapeutics, a key player in gene therapy, announced a restructuring plan in July that included a 36% reduction in its workforce, affecting 500 employees. The company also pivoted its pipeline to prioritize siRNA programs and added an FDA-requested black box warning to its Duchenne muscular dystrophy gene therapy, Elevidys.

Biogen has officially ended all gene therapy work using adeno-associated virus capsids, resulting in a small number of layoffs. The company stated it would redirect resources to modalities with higher potential for improved treatment outcomes. Similarly, Arena BioWorks laid off 30% of its workforce as part of a shift away from cell and gene therapy work.

Industry-Wide Impact and Government Involvement

The layoffs extend beyond individual companies, affecting the broader biomedical research and science community. The Department of Health and Human Services (HHS) announced plans to end mRNA vaccine work funded by the Biomedical Advanced Research and Development Authority, creating uncertainty in the field. This decision has impacted companies like Moderna, which implemented layoffs this summer, while smaller biotechs like NextRNA Therapeutics have been forced to wind down operations.

The recent government shutdown has further complicated the situation, with 32,460 HHS employees furloughed. Additionally, more than 150,000 federal workers across all departments resigned as part of a buyout program prior to the shutdown, exacerbating the loss of expertise in the sector.

As the pharmaceutical industry continues to navigate these challenges, the impact of these widespread layoffs and strategic shifts will likely reverberate throughout the sector, potentially reshaping the landscape of drug development and healthcare innovation in the coming years.