Pharmaceutical Industry Faces Widespread Layoffs and Strategic Shifts Amid Challenging Market Conditions

The pharmaceutical and biotech sectors continue to grapple with a wave of layoffs and strategic realignments as companies adapt to shifting market dynamics and funding challenges. Recent months have seen numerous organizations announce significant workforce reductions and pipeline reprioritizations in efforts to extend cash runways and focus resources on key programs.

Major Players Implement Cost-Cutting Measures

Industry giants are not immune to the ongoing pressures. Bristol Myers Squibb recently disclosed plans for an additional $2 billion in cost savings through 2027, on top of its existing $1.5 billion reduction program. The company will cut 223 employees at its Lawrenceville, New Jersey site, bringing total layoffs there to 290 this year.

Novartis is reducing its U.S. workforce by 427 employees at its East Hanover, New Jersey headquarters between June and October. This follows the closure of sites in Germany and Boston acquired from MorphoSys, affecting 330 workers.

Biogen confirmed undisclosed research unit layoffs as part of efforts to "reinvigorate" its drug discovery capabilities. The cuts come amid Biogen's broader cost-reduction initiative targeting $1 billion in savings.

Biotech Firms Face Difficult Decisions

Smaller biotech companies have been particularly hard-hit, with many announcing significant staff reductions:

• Intellia Therapeutics is cutting 27% of its workforce, around 142 employees, while discontinuing development of its NTLA-3001 therapy.
• IGM Biosciences will lay off 73% of its staff, affecting 100 employees, and halt work on two autoimmune drug candidates.
• Atara Biotherapeutics is reducing headcount by 50% following FDA rejection of its T cell therapy for transplant-related blood cancer.
• CytomX Therapeutics announced a 40% workforce reduction, impacting 46 employees, to focus resources on clinical programs.

Strategic Shifts and Pipeline Reprioritizations

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

Galapagos plans to split into two entities by mid-2025, cutting 40% of its workforce (about 300 employees) across European operations. The company will close its French site, decrease staff in Belgium, and discontinue its small molecules program.

Zentalis Pharmaceuticals is reducing staff by 40% as it focuses efforts on advancing its lead candidate azenosertib for ovarian and related cancers. The move aims to extend the company's cash runway into late 2027.

Passage Bio announced a 55% workforce reduction, affecting about 32 people, to extend its cash runway into Q1 2027. The company is transitioning to an outsourced analytical testing model to support its PBFT02 program advancement.

As the industry continues to navigate challenging market conditions, further restructuring and strategic shifts are likely. Companies are increasingly prioritizing late-stage assets and streamlining operations to maximize efficiency and preserve capital for key programs.