Recursion Pharmaceuticals Announces Layoffs Amid Pipeline Restructuring

Recursion Pharmaceuticals, a leading AI-driven biotech company, has announced a significant workforce reduction as part of its ongoing efforts to streamline operations and focus on key therapeutic areas. The move comes in the wake of recent pipeline cutbacks and follows the company's high-profile acquisition of Exscientia in 2024.

Workforce Reduction and Financial Impact

Recursion revealed plans to lay off 20% of its staff, a decision that will affect approximately 160 employees based on the company's reported headcount of around 800 at the beginning of 2025. The restructuring is expected to cost the company about $11 million in severance fees and related expenses, as disclosed in a recent Securities and Exchange Commission filing.

Despite the substantial costs associated with the layoffs, Recursion maintains a positive outlook on its financial position. The company projects that its current cash reserves of $500 million will extend its runway into 2027, aligning with previous forecasts made during the announcement of pipeline adjustments in May.

Pipeline Refocus and Strategic Shift

The workforce reduction is directly tied to Recursion's strategic decision to narrow its research and development focus on oncology and rare diseases. This shift has led to the deprioritization of several clinical-stage programs, including:

• Neurofibromatosis type 2
• Cerebral cavernous malformation
• C. difficile infection

Additionally, Recursion has paused work on an asset being developed for reversibility and central nervous system penetration in solid tumors and wound down a preclinical program targeting an undisclosed area.

Post-Merger Integration and Future Outlook

The recent changes at Recursion come in the aftermath of its merger with Exscientia, another AI-focused pharmaceutical company, in late 2024. At the time of the acquisition, Recursion had projected approximately 10 clinical readouts over an 18-month period for the combined entity. The merger also brought with it 10 partnered programs, potentially worth over $20 billion in milestone payments upon approval.

Despite the current restructuring, Recursion continues to make progress in its partnerships. In May, the company reported a $7 million milestone payment from Sanofi, resulting from the successful use of Recursion's platform to identify an oral small molecule against a "high-interest immune cell target."

As Recursion navigates this period of transition, the pharmaceutical industry will be watching closely to see how the company's AI-driven approach to drug discovery and development fares in an increasingly competitive and rapidly evolving landscape.