Pharmaceutical Industry Faces Continued Layoffs and Restructuring Amid Shifting Priorities

The pharmaceutical and biotech sectors continue to experience significant workforce reductions and organizational changes as companies realign their priorities and resource allocation. Recent weeks have seen a wave of layoffs affecting thousands of employees across multiple companies, ranging from industry giants to smaller biotechs.

Major Players Implement Cost-Cutting Measures

Bristol Myers Squibb (BMS) announced plans to lay off 195 more employees at its Lawrenceville, New Jersey sites, bringing its total job cuts to nearly 1,330 this year. The layoffs are part of BMS's strategic initiative to save $1.5 billion through 2025, which includes eliminating about 2,200 jobs by the end of 2024.

Similarly, Johnson & Johnson disclosed plans to lay off 231 employees at its New Brunswick, New Jersey headquarters. The company cited the need to adapt to a "complex and rapidly changing environment" as the reason for the cuts.

Bayer is also continuing its workforce reduction, laying off 57 employees at its Whippany, New Jersey headquarters. This follows earlier cuts of 35 employees in May and the elimination of 1,500 jobs, mostly management positions, earlier this year.

Biotechs Face Tough Decisions After Clinical Setbacks

FibroGen announced it will eliminate 75% of its U.S.-based workforce after two late-stage trials failed to meet primary endpoints. The company is implementing an "immediate and significant" cost reduction plan to terminate its pamrevlumab program and halt related obligations.

Athira Pharma plans to lay off about 70% of its workforce, approximately 49 positions, following disappointing results from its Phase II/III LIFT-AD trial of fosgonimeton in Alzheimer's disease. The company will now focus on advancing clinical development of ATH-1105 for neurodegenerative diseases.

Strategic Shifts and Pipeline Reprioritization

Several companies are restructuring to focus on core programs and extend cash runways. Bluebird bio announced a 25% workforce reduction as part of a restructuring aimed at reducing cash operating expenses by 20%. The company will sharpen its focus on the commercial launches of its gene therapies Lyfgenia, Skysona, and Zynteglo.

Vir Biotechnology is laying off 25% of its workforce, eliminating approximately 140 roles, as it shifts focus from COVID-19 and influenza to hepatitis B and D programs and moves into the cancer space via a deal with Sanofi.

These layoffs and restructurings reflect the ongoing challenges faced by the pharmaceutical industry, including clinical trial setbacks, changing market dynamics, and the need to allocate resources more efficiently. As companies continue to adapt to these pressures, further workforce reductions and strategic realignments are likely in the coming months.