Pharmaceutical Industry Faces Widespread Layoffs Amid Strategic Shifts and Market Pressures

The pharmaceutical and biotech sectors are experiencing a wave of workforce reductions as companies realign priorities, respond to clinical setbacks, and adapt to challenging market conditions. Recent announcements from major players like Sarepta Therapeutics, Bristol Myers Squibb, and Novartis highlight the industry-wide trend of cost-cutting measures and strategic reorganizations.

Sarepta Slashes Workforce Following Gene Therapy Setbacks

Sarepta Therapeutics announced plans to lay off approximately 500 employees, representing about 36% of its staff, following recent setbacks with its Duchenne muscular dystrophy (DMD) gene therapy Elevidys. The restructuring comes after two patient deaths related to acute liver failure in March and June, which led to restrictions on the therapy's use in older, non-ambulatory patients.

CEO Doug Ingram emphasized the necessity of the cuts, stating, "Failure to adapt would risk our long-term viability as an organization and decrease the opportunity to bring the greatest benefit to the greatest number of patients living with rare disease."

The company expects to save over $400 million annually by 2026 through the workforce reduction and pausing several research programs. Sarepta will now focus on its approved DMD treatments and a select group of RNA-based medicines being developed in partnership with Arrowhead Pharmaceuticals.

The FDA is adding a black box warning about liver failure risk to Elevidys' label. Sales of the gene therapy dropped to $282 million in Q2 2025, down from $375 million in Q1. Sarepta projects annual sales for Elevidys in ambulatory patients to be at least $500 million through 2027.

Big Pharma Continues Cost-Cutting Initiatives

Bristol Myers Squibb (BMS) is expanding its ongoing cost reduction efforts, targeting an additional $2 billion in savings through 2027. This comes on top of a previous $1.5 billion cost-cutting program announced in 2024. The company's strategic reorganization has already resulted in significant layoffs, including over 1,300 employees at its Lawrenceville, New Jersey site.

Novartis is also trimming its workforce, with plans to lay off 427 employees at its U.S. headquarters in East Hanover, New Jersey between June and October 2025. This follows the company's decision to close sites in Germany and Boston in late 2024, which affected 330 employees.

Other major pharmaceutical companies implementing workforce reductions include:

• Pfizer: Cutting 56 employees in San Diego as part of ongoing efficiency measures.
• Merck: Eliminating 163 jobs at its Pennsylvania manufacturing site, which is slated for closure.
• Gilead Sciences: Laying off 36 employees at its Oceanside, California facility.

Biotech Firms Face Restructuring and Pipeline Shifts

Smaller biotech companies are not immune to the industry-wide belt-tightening, with many announcing significant layoffs and strategic pivots:

• Intellia Therapeutics is reducing its workforce by 27%, affecting approximately 142 employees, as it focuses on high-value gene editing programs.
• IGM Biosciences announced a 73% workforce reduction, cutting 100 jobs and halting development of two autoimmune drug candidates.
• Atara Biotherapeutics is laying off about 50% of its staff following the FDA's rejection of its T cell therapy for transplant-related blood cancer.
• CytomX Therapeutics is cutting 40% of its employees to redirect resources to clinical programs.

These restructurings often coincide with pipeline reprioritizations, as companies seek to conserve cash and focus on their most promising drug candidates. For instance, Galapagos plans to split into two entities by mid-2025, cutting 40% of its European workforce in the process and refocusing on cell therapies.

The ongoing wave of layoffs reflects broader challenges facing the pharmaceutical industry, including pricing pressures, regulatory hurdles, and the need to adapt to evolving therapeutic landscapes. As companies navigate these headwinds, further workforce reductions and strategic realignments are likely to continue shaping the sector in the coming months.