Pharmaceutical Industry Faces Wave of Layoffs Amid Strategic Shifts and Financial Pressures

The pharmaceutical and biotech sectors are experiencing a significant upheaval as companies across the industry announce substantial workforce reductions, pipeline reprioritizations, and strategic realignments. This trend, which began in 2024, has intensified in the early months of 2025, affecting both large pharmaceutical corporations and smaller biotech firms.

Major Players Implement Cost-Cutting Measures

Bristol Myers Squibb (BMS) is leading the charge in cost-cutting initiatives, announcing an additional $2 billion in savings planned through 2027, on top of an ongoing program targeting $1.5 billion in cuts by the end of 2025. The company has already laid off over 2,200 employees since 2024 and continues to trim its workforce across multiple locations. In Lawrenceville, New Jersey alone, BMS has cut 290 jobs in 2025, with more reductions expected.

Novartis is also making significant cuts, laying off 427 employees at its U.S. headquarters in East Hanover, New Jersey. This follows the closure of sites in Germany and Boston, resulting in 330 job losses. The Swiss pharma giant is restructuring while actively pursuing acquisitions, having recently invested $3.1 billion to acquire Anthos Therapeutics.

Pfizer, facing challenges in its post-COVID landscape, is reducing its San Diego workforce by 56 employees as part of a broader cost realignment program aiming to achieve $4.5 billion in savings by the end of 2025. The company is also optimizing its manufacturing operations, targeting an additional $1.5 billion in savings by 2027.

Biotech Firms Face Tough Decisions

Smaller biotech companies are not immune to the industry-wide pressures. Atara Biotherapeutics announced a 50% reduction in its workforce following the FDA's rejection of its T cell therapy for transplant-related blood cancer. The company expects to complete the layoffs by June, potentially leaving it with around 80 employees.

Intellia Therapeutics is cutting approximately 27% of its staff as part of a reorganization program focused on high-value gene editing programs. The company is discontinuing development of its NTLA-3001 therapy for alpha-1 antitrypsin deficiency-associated lung disease.

CytomX Therapeutics is reducing its workforce by about 40%, affecting 46 employees, to redirect resources to its clinical programs. The company is prioritizing the development of CX-2051, an antibody-drug conjugate for advanced metastatic colorectal cancer.

Strategic Shifts and Pipeline Reprioritizations

Many companies are using this period of restructuring to refocus their pipelines and research efforts. Galapagos announced plans to split into two entities by mid-2025, cutting 40% of its workforce in the process. The company will create an innovative medicines specialist and a cell therapy company, while discontinuing its small molecules program.

Repare Therapeutics is reprioritizing its pipeline to focus on advancing its Phase I clinical programs, RP-1664 and RP-3467, while exploring partnerships for other assets. The company expects the restructuring to extend its cash runway into mid-2027.

Generation Bio is reorganizing to support clinical development of its T cell-directed medicines, cutting staff in Cambridge by 20% and parting ways with key executives. The company plans to submit its first Investigational New Drug application in the second half of 2026.

These strategic shifts reflect the industry's ongoing challenges in drug development, changing market dynamics, and the need to optimize resources in a competitive landscape.