Pharmaceutical Industry Faces Widespread Layoffs Amid Restructuring and Pipeline Shifts

The pharmaceutical and biotech sectors are experiencing a wave of workforce reductions as companies realign their priorities, streamline operations, and adapt to challenging market conditions. Major players and smaller biotechs alike are making difficult decisions to extend cash runways and focus resources on key programs.

Big Pharma Trims Headcount to Boost Efficiency

Several large pharmaceutical companies have announced significant layoffs as part of broader cost-cutting and restructuring initiatives. Merck revealed plans to eliminate approximately 6,000 jobs globally, representing about 8% of its workforce, as part of a multiyear process to save $3 billion through 2027. The company aims to reallocate resources to support R&D and the launch of up to 20 new products.

Bristol Myers Squibb is continuing its strategic reorganization, targeting an additional $2 billion in savings through 2027 on top of an ongoing $1.5 billion cost reduction program. The company has already cut over 1,200 jobs in New Jersey alone since early 2024.

Novartis is reducing its U.S. workforce by 427 employees at its headquarters in East Hanover, New Jersey. This follows previous cuts of 330 jobs in December 2024 as the company closed sites in Germany and Boston.

Pfizer announced layoffs of 56 employees in San Diego as part of broader cost reduction efforts targeting $6 billion in savings by the end of 2027. The company is actively reducing its cost base to operate more efficiently.

Biotechs Face Tough Decisions Amid Funding Challenges

Smaller biotechs and startups are not immune to the industry-wide belt-tightening. Many are making deep cuts to preserve cash and refocus on core programs:

Atara Biotherapeutics is cutting about 50% of its workforce after the FDA rejected its T cell therapy for transplant-related blood cancer. The layoffs will leave the company with around 80 employees.

Cargo Therapeutics announced a 50% reduction in force, letting go of 81 employees, after discontinuing a mid-stage study of its lead CAR-T candidate.

Third Harmonic Bio is laying off 50% of its staff as it prepares to advance its oral KIT inhibitor THB335 into Phase II development. The company is suspending all R&D work not related to THB335.

IGM Biosciences revealed plans to cut 73% of its workforce, affecting 100 employees, and halt development of two autoimmune drug candidates. The company is now exploring strategic alternatives.

Pipeline Prioritization Drives Organizational Changes

Many companies are refocusing their pipelines and organizational structures to weather current market challenges:

Intellia Therapeutics announced a 27% workforce reduction as part of a reorganization to focus on its lead gene editing programs NTLA-2002 and nexiguran ziclumeran. The company will discontinue development of NTLA-3001 for alpha-1 antitrypsin deficiency.

Galapagos unveiled plans to split into two entities by mid-2025 and cut 40% of its workforce, affecting about 300 employees across Europe. The company will focus on cell therapies and innovative medicines separately.

CytomX Therapeutics is reducing its workforce by 40%, or 46 employees, to direct resources to clinical programs, particularly its antibody-drug conjugate CX-2051 for colorectal cancer.

As the pharmaceutical industry continues to evolve, companies are making tough choices to position themselves for long-term success. While painful in the short term, these restructuring efforts aim to create more efficient and focused organizations capable of delivering innovative therapies to patients.