Layoffs Continue to Sweep Pharmaceutical Industry Amid Strategic Shifts and Financial Pressures

The pharmaceutical and biotech sectors are experiencing another wave of workforce reductions as companies realign their priorities and grapple with financial challenges. Recent weeks have seen major players like Bristol Myers Squibb, Novartis, and Biogen announce significant layoffs, while smaller biotechs face existential threats amid funding difficulties.

Big Pharma Trims Headcount to Boost Efficiency

Bristol Myers Squibb (BMS) is continuing its sweeping cost-cutting initiative, announcing an additional $2 billion in planned savings through 2027. This comes on top of an ongoing program targeting $1.5 billion in cuts by the end of 2025. The dramatic upheaval has already resulted in over 2,200 job cuts, with more expected as BMS aims to become a "leaner, more efficient company while investing behind growth brands and promising areas of science."

Novartis is also reducing its U.S. workforce, laying off 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, which affected 330 employees in late 2024.

Biogen confirmed it will lay off an undisclosed number of employees from its research unit as part of efforts to "reinvigorate" its drug discovery operations. The 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 approximately 1,000 jobs on the chopping block.

Biotechs Face Existential Threats Amid Funding Crunch

Smaller biotechs are feeling the squeeze as well, with many forced to make drastic cuts or shut down entirely due to funding challenges. Cargo Therapeutics announced it is laying off 81 people, about 50% of its staff, after discontinuing a mid-stage study of its lead CAR-T candidate. The company cited disappointing clinical results as the reason for the pipeline shift.

IGM Biosciences is cutting 73% of its workforce, affecting 100 employees, and halting development of two autoimmune drug candidates. The dramatic restructuring leaves the company with just 37 employees as it explores strategic alternatives.

Omega Therapeutics appears to be on the brink of bankruptcy, cutting staff and exploring a potential wind-down of operations. The company has until February 10 to commence bankruptcy proceedings and go through a sale process with its founder, Flagship Pioneering.

Strategic Shifts Drive Workforce Reductions

Many companies are using layoffs as part of broader strategic realignments. Galapagos announced plans to split into two entities by mid-2025, cutting 40% of its workforce in the process. The reorganization will result in the closure of its French site and reduced staff in Belgium.

Intellia Therapeutics is reducing its workforce by around 27% as it focuses resources on high-value gene editing programs. The company will discontinue development of its NTLA-3001 therapy for alpha-1 antitrypsin deficiency-associated lung disease.

Generation Bio is cutting 20% of its staff in Cambridge as it reorganizes to support clinical development of T cell-directed medicines. The move includes C-suite changes and a shift towards developing siRNA therapeutics for autoimmune diseases.

As the pharmaceutical industry continues to evolve, companies are being forced to make difficult decisions to streamline operations, conserve cash, and focus on their most promising assets. While painful in the short term, these strategic shifts aim to position firms for long-term success in an increasingly competitive and challenging market landscape.