Pharmaceutical Industry Faces Widespread Layoffs Amid Strategic Shifts

The pharmaceutical and biotech sectors continue to grapple with significant workforce reductions and strategic realignments as companies adapt to challenging market conditions and reprioritize their pipelines.

Major Players Implement Cost-Cutting Measures

Novo Nordisk announced plans to lay off approximately 9,000 employees globally, including around 5,000 in Denmark, as part of efforts to generate $1.25 billion in annual savings by 2026. The 11% headcount reduction comes despite the company's recent success with weight loss drugs like Wegovy.

Meanwhile, Bristol Myers Squibb is expanding its cost-cutting program, targeting an additional $2 billion in savings through 2027 on top of an existing $1.5 billion reduction plan. The company continues to trim its workforce, with recent cuts affecting 223 employees in Lawrenceville, New Jersey.

Merck also unveiled plans to eliminate about 6,000 jobs globally, representing roughly 8% of its workforce, as part of a $3 billion cost reduction initiative. The savings are intended to support the launch of up to 20 new products and bolster R&D efforts.

Biotechs Face Difficult Decisions Amid Funding Challenges

Smaller biotechs have not been spared from the industry-wide belt-tightening. Cargo Therapeutics announced it would lay off approximately 50% of its staff after discontinuing a mid-stage study of its lead CAR-T candidate. The cuts will affect 81 employees.

Atara Biotherapeutics revealed plans to reduce its workforce by about 50% following the FDA's rejection of its T cell therapy for transplant-related blood cancer. The layoffs are expected to be completed by June, potentially leaving the company with around 80 employees.

In a more drastic move, IGM Biosciences announced it would cut 73% of its workforce and halt development of two autoimmune drug candidates. The layoffs will affect 100 employees, leaving the company with just 37 staff members.

Strategic Realignments Shape Industry Landscape

Beyond workforce reductions, several companies are undergoing significant strategic shifts. Galapagos plans to split into two entities by mid-2025, cutting 40% of its workforce in the process. The reorganization will result in the closure of its French site and staff reductions in Belgium.

Intellia Therapeutics announced a reorganization program that will reduce its workforce by around 27% as it focuses on high-value gene editing programs. The company will discontinue development of its NTLA-3001 therapy for alpha-1 antitrypsin deficiency-associated lung disease.

These widespread changes reflect the ongoing challenges faced by the pharmaceutical and biotech industries as they navigate market pressures, regulatory hurdles, and the need to prioritize promising pipeline assets.