Pharmaceutical Industry Continues Major Workforce Reductions Amid Strategic Shifts

The pharmaceutical and biotech sectors are experiencing another wave of significant layoffs and restructuring as companies aim to cut costs, streamline operations, and refocus their strategic priorities. Recent announcements from multiple firms highlight the ongoing trend of workforce reductions across the industry.

Wave of Layoffs Hits Large and Small Companies Alike

GRO Biosciences recently cut an undisclosed number of employees, including research staff, as it explores strategic alternatives. The Cambridge, Massachusetts-based synthetic biology company, which raised $60.3 million in Series B funding last July, is now looking to advance its lead program ProGly-Uricase for severe and refractory gout.

Atea Pharmaceuticals announced a 25% workforce reduction, affecting about 14 employees, to extend its cash runway through 2027. The Boston-based biotech is preparing for a Phase III trial of its hepatitis C virus treatment.

ALX Oncology is letting go of 30% of its workers, approximately 27 employees, as part of a strategic prioritization exercise. The South San Francisco-based company will now focus on developing its CD47-blocker evorpacept for breast and colorectal cancer.

Meanwhile, Bristol Myers Squibb continues its previously announced cost-cutting measures, laying off 57 workers from its Redwood City, California facility. This is part of a broader initiative to eliminate about 2,200 jobs by the end of 2024.

Strategic Shifts and Pipeline Reprioritization

Several companies are using layoffs as part of broader strategic realignments:

Atara Biotherapeutics disclosed a roughly 50% workforce reduction for the second time this year, potentially affecting about 40 employees. The cuts come as Atara discontinues development activities for its ATA3219 and ATA3431 programs, including ending all clinical studies of the allogeneic anti-CD19 CAR T cell therapy ATA3219.

CRISPR Therapeutics is laying off an undisclosed number of employees across its Boston, San Francisco, and Framingham, Massachusetts locations. The move comes despite the company starting the year with a strong balance sheet of about $1.9 billion in cash and ongoing success with its Casgevy gene editing therapy developed with Vertex Pharmaceuticals.

Eisai is cutting 6.8% of its U.S. workforce, primarily in commercial, medical and corporate functions. The 121 employee reduction is part of the Tokyo-based company's strategy to improve operations and ensure long-term sustainability.

Industry-Wide Trend Continues

The latest round of layoffs follows a challenging 2023 for the biopharma industry, with several companies cutting hundreds or even thousands of employees. As 2024 progresses, the trend shows no signs of slowing, with companies of all sizes reevaluating their workforce needs in response to changing market conditions, pipeline setbacks, and the push for greater operational efficiency.

While the immediate impact on affected employees is significant, many companies frame these moves as necessary steps to ensure long-term viability and redirect resources to their most promising programs. The industry continues to navigate a complex landscape of scientific advances, regulatory challenges, and economic pressures.