Pharmaceutical Industry Hit by Wave of Layoffs Amid Strategic Shifts

The pharmaceutical and biotech sectors are grappling with a surge of workforce reductions as companies realign their priorities and respond to market pressures. From small biotechs to industry giants, firms across the spectrum are trimming headcounts to extend cash runways and refocus on core programs.

Major Players Implement Cost-Cutting Measures

Bristol Myers Squibb (BMS) continues its sweeping reorganization, announcing an additional $2 billion in planned savings through 2027. This comes on top of an ongoing program targeting $1.5 billion in cost cuts by the end of 2025. The dramatic upheaval has resulted in layoffs across multiple sites, including 223 employees at its Lawrenceville, New Jersey location.

Novartis is reducing its U.S. workforce by 427 employees at its East Hanover, New Jersey headquarters. This follows the company's December 2024 decision to let go of 330 employees as part of closing sites in Germany and Boston acquired from MorphoSys.

Biogen confirmed it will lay off an undisclosed number of employees from its research unit as part of efforts to "reinvigorate" its drug discovery machinery. This move comes as Biogen's stock languishes at a five-year low and follows an aggressive cost-cutting program announced in July 2023 that put around 1,000 jobs on the chopping block.

Biotechs Face Tough Decisions Amid Funding Challenges

Smaller biotechs are not immune to the industry-wide belt-tightening. Atara Biotherapeutics announced it will cut about 50% of its workforce following the FDA's rejection of its T cell therapy for transplant-related blood cancer. The cuts are expected to be mostly complete by June, leaving the company with around 80 employees.

IGM Biosciences is implementing even more drastic measures, cutting 73% of its workforce and halting development of two autoimmune drug candidates. The layoffs will affect 100 employees, leaving the business with just 37 staff members.

Intellia Therapeutics is reducing its workforce by around 27% as part of a reorganization program announced on January 10th. The company will focus its efforts on high-value programs, specifically its investigational gene editors NTLA-2002 for hereditary angioedema and nexiguran ziclumeran for transthyretin amyloidosis.

Strategic Shifts and Pipeline Reprioritization

Many companies are using workforce reductions as an opportunity to realign their strategic focus. Galapagos announced plans to split into two entities by mid-2025 and cut 40% of its workforce, affecting about 300 employees across its European operations. The reorganization will result in the closure of its site in France and decreased staff in Belgium.

CytomX Therapeutics is cutting about 40% of its employees to direct capital resources to its clinical programs. The company's top strategic objective for 2025 is the development of CX-2051, an antibody-drug conjugate being developed initially for advanced metastatic colorectal cancer.

As the pharmaceutical industry navigates these challenging times, the focus remains on streamlining operations, extending cash runways, and prioritizing the most promising pipeline candidates. While the immediate impact on employees is significant, companies hope these moves will position them for long-term success in an increasingly competitive and resource-constrained environment.