Recursion Pharmaceuticals Cuts Workforce by 20% to Extend Cash Runway

Recursion Pharmaceuticals, a Utah-based biotech company, has announced a significant reduction in its workforce as part of a strategic move to extend its financial runway. The company plans to lay off approximately 20% of its employees, affecting around 160 staff members, in an effort to streamline operations and conserve cash.

Layoffs and Financial Impact

The workforce reduction, disclosed in a recent SEC filing, is expected to result in one-time charges of about $11 million, primarily related to severance payments and benefits. Despite these costs, Recursion anticipates that this restructuring will allow the company to remain operational into the fourth quarter of 2027.

Following the layoffs, Recursion projects its cash burn for the current year to be less than $450 million, with a further reduction to under $390 million expected in 2026. As of March 31, 2025, the company reported a cash position of $509 million.

Recent Financial Performance and Strategic Shifts

Recursion's first-quarter financial report for 2025 revealed a deepening net loss of $203 million, compared to $91.4 million in the same period last year. This financial pressure appears to be a driving factor behind the company's recent strategic decisions.

In addition to the workforce reduction, Recursion has announced the discontinuation of several drug development programs. These include:

• REC-2282: An oral inhibitor of the HDAC enzyme for NF2-mutated meningiomas
• REC-994: A superoxide scavenger small molecule for cerebral cavernous malformation
• REC-3964: An oral non-antibiotic drug for C. difficile infection, which may be considered for out-licensing

Post-Merger Integration and Previous Restructuring

The latest round of layoffs comes in the wake of Recursion's merger with AI specialist Exscientia in August 2024. The combined entity, which retained the Recursion name, had anticipated annual synergies exceeding $100 million. However, this merger has led to multiple rounds of workforce reductions.

In November 2024, shortly after the merger, Recursion implemented an initial reduction-in-force initiative. The company's recent SEC filing partly attributes the latest layoffs to ongoing "post-integration employee transitions," suggesting that the full impact of the merger is still being realized.

These strategic moves reflect the challenging landscape of the biotech industry, where companies must balance innovative research with financial sustainability. As Recursion continues to navigate these challenges, the industry will be watching closely to see how these decisions impact the company's long-term prospects and drug development pipeline.