Biopharma Industry Faces Record Layoffs Amid Challenging Market Conditions

The pharmaceutical and biotech industry is grappling with an unprecedented wave of layoffs in 2025, as companies struggle to navigate a difficult market environment and funding constraints. Recent data reveals a significant increase in workforce reductions across the sector, with May 2025 marking a four-year high in reported layoff rounds.

Layoff Trends and Industry Impact

According to Fierce Biotech's Layoff Tracker, the first half of 2025 saw at least 128 layoff rounds, representing a 32% year-over-year increase compared to the same period in 2024. May 2025 alone accounted for 29 reductions in force (RIFs), the highest monthly figure recorded in the past four years.

The surge in layoffs has affected companies of all sizes, from startups to Big Pharma. Bristol Myers Squibb, for instance, has implemented four layoff rounds in the first half of 2025, eliminating at least 863 roles as part of a major cost-cutting initiative.

Biotech Closures and Resurrections

While the number of biotech closures decreased from eight in Q1 to four in Q2 2025, several notable companies have been forced to wind down operations. These include Vincerx Pharma, Third Harmonic Bio, Octagon Therapeutics, and iTeos Therapeutics.

In a surprising turn of events, Vor Bio managed to resurrect itself after nearly facing extinction. The company secured a $4 billion biobucks deal with China's RemeGen, centered around telitacicept, a recombinant dual-target fusion protein for autoimmune conditions. This deal, along with a $175 million private placement, has breathed new life into the Boston-based biotech.

Market Pressures and Funding Challenges

Many biopharmas have cited external pressures and funding cuts as reasons for workforce reductions. Eikon Therapeutics, for example, laid off 15% of its staff due to "external forces," including government funding cuts affecting academic institutions.

Similarly, gene sequencing company 10x Genomics shed 8% of its global workforce as instrument sales plummeted. CEO Serge Saxonov attributed the decline to "increasingly unpredictable customer purchasing behavior," with a significant portion of the company's revenue typically supported by U.S. academic and government research funding.

The ongoing macroeconomic uncertainty continues to exacerbate biotech's prolonged bear market, suggesting that the industry may face further challenges in the coming months. While layoff trends represent only one aspect of the sector's health, the data from the first half of 2025 indicates that the biopharma industry might continue to experience turbulence for the remainder of the year.