Pharmaceutical Industry Faces Widespread Layoffs Amid Strategic Shifts and Financial Pressures

The pharmaceutical and biotech sectors are experiencing a significant wave of workforce reductions as companies across the industry implement cost-cutting measures and strategic realignments. From major players like Bristol Myers Squibb and Novartis to smaller biotechs, the trend of layoffs and restructuring efforts is reshaping the landscape of drug development and commercialization.

Big Pharma Trims Workforce in Pursuit of Efficiency

Bristol Myers Squibb (BMS) continues its extensive 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 latest round of layoffs affects 516 employees in Lawrenceville, New Jersey, bringing the total number of job cuts at that location to 806 this year alone.

Novartis is also reducing its U.S. workforce significantly, with 427 employees set to be laid off from its headquarters in East Hanover, New Jersey. This follows the company's December 2024 decision to let go of 330 employees as part of closing sites in Germany and Boston acquired from MorphoSys.

Meanwhile, Merck is shutting down its manufacturing site in Pennsylvania, resulting in 163 job losses. The layoffs will occur in three phases, with the final round scheduled for 2026.

Biotech Firms Face Financial Pressures and Pipeline Setbacks

Smaller biotech companies are not immune to the industry-wide belt-tightening. 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 cuts, affecting around 80 employees, are expected to be completed by June.

Cargo Therapeutics is laying off 81 employees, approximately half of its staff, after discontinuing a mid-stage study of its lead CAR-T candidate. The move comes as a surprise to analysts who had previously seen promising results from earlier trials.

Intellia Therapeutics is reducing its workforce by 27%, or about 142 employees, as part of a reorganization program aimed at focusing resources on high-value programs. The company will discontinue development of its NTLA-3001 therapy for alpha-1 antitrypsin deficiency-associated lung disease.

Strategic Shifts and Pipeline Reprioritization

Many companies are using layoffs as part of broader strategic shifts. Galapagos announced plans to split into two entities by mid-2025, cutting 40% of its workforce in the process. The reorganization will affect about 300 employees across its European operations and involve closing its site in France.

Repare Therapeutics is cutting an unspecified number of staff as it reprioritizes its pipeline to focus on advancing its Phase I clinical programs. The Quebec-based biotech expects the headcount reductions will help extend its cash runway into mid-2027.

Y-mAbs Therapeutics is reducing its workforce by about 13% as part of a realignment that includes establishing two business units. The company is moving some roles from Denmark to the U.S. to more efficiently coordinate advancing its radiopharmaceutical platform.

As the pharmaceutical industry continues to navigate challenging market conditions and evolving research priorities, the trend of workforce reductions and strategic realignments is likely to persist. Companies are increasingly focused on streamlining operations, extending cash runways, and concentrating resources on their most promising drug candidates and therapeutic areas.