Moderna Announces Major Workforce Reduction Amid Cost-Cutting Efforts

Moderna, the Massachusetts-based mRNA specialist, has revealed plans to reduce its global workforce by approximately 10% as part of a broader cost-cutting initiative. The announcement comes as the company grapples with declining COVID-19 vaccine sales and faces challenges in its product pipeline.

Workforce Reduction and Cost-Cutting Measures

In a memo to employees, Moderna CEO Stéphane Bancel outlined the company's decision to downsize its workforce, bringing the total headcount to fewer than 5,000 by the end of the year. This reduction is part of Moderna's efforts to slash annual operating expenses by about $1.5 billion by 2027.

"Every effort was made to avoid affecting jobs," Bancel stated in the letter. "But today, reshaping our operating structure and aligning our cost structure to the realities of our business are essential to remain focused and financially disciplined, while continuing to invest in our science on the path to 2027."

The workforce reduction follows earlier cost-cutting measures, including scaling back R&D spending and reducing manufacturing costs. Moderna had previously announced plans to cut R&D spending by $4 billion by 2028 and reduce GAAP operating costs by $1.4 billion to $1.7 billion between 2025 and 2027.

Challenges and Future Outlook

Moderna faces several challenges as it navigates the post-pandemic landscape. The company has experienced a sharp decline in sales of its original COVID-19 vaccine, Spikevax, as the market transitions from pandemic to endemic status. Additionally, Moderna's RSV vaccine, mRESVIA, has struggled to gain traction against competitors from GSK and Pfizer.

Despite these setbacks, Bancel emphasized the company's commitment to its pipeline, stating that Moderna is "sharpening our focus, becoming leaner, and staying ambitious in oncology, rare diseases and latent viruses." The CEO also noted that the company expects up to eight regulatory approvals in the next three years, building on its current portfolio of three approved products.

In June, Moderna received FDA approval for its next-generation COVID-19 vaccine, mNEXSPIKE, albeit with certain restrictions. The vaccine is approved for all adults aged 65 and older, while individuals between 12 and 64 years old must have at least one underlying risk factor for severe COVID-19 to qualify for vaccination.

As Moderna continues to adapt to the evolving pharmaceutical landscape, the company remains focused on its long-term strategy and pipeline development. The upcoming second-quarter earnings report, scheduled for release on Friday, is expected to provide further insights into Moderna's financial position and future prospects.