Moderna Leads Industry-Wide Layoffs as Pharmaceutical Companies Streamline Operations

Moderna, a leading mRNA vaccine developer, announced a significant workforce reduction of 10% globally, affecting hundreds of employees. This move is part of a broader trend of layoffs and restructuring efforts across the pharmaceutical industry, as companies aim to cut costs and refocus their resources on high-priority programs.

Moderna's Cost-Cutting Measures

Moderna's CEO, Stéphane Bancel, informed employees of the decision to downsize in a company-wide memo. The reduction will bring the total headcount to under 5,000 by the end of 2025. This move is part of Moderna's larger cost-cutting initiative, which aims to reduce annual operating expenses by approximately $1.5 billion by 2027.

Bancel emphasized that the decision was not made lightly, stating, "Every effort was made to avoid affecting jobs. 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 layoffs come as Moderna faces challenges in its COVID-19 vaccine business, which has seen declining sales in the transition from a pandemic to an endemic market. Despite these setbacks, the company remains committed to launching eight new products in the next three years and is sharpening its focus on oncology, rare diseases, and latent viruses.

Industry-Wide Restructuring

Moderna's workforce reduction is part of a larger trend in the pharmaceutical industry. Several other companies have announced similar measures:

1. Bristol Myers Squibb (BMS) is implementing an additional $2 billion in cost savings through 2027, on top of an ongoing program targeting $1.5 billion in cuts by the end of 2025. This restructuring has already resulted in the elimination of over 2,200 jobs since 2024.

2. Biogen has initiated layoffs in its research unit as part of a strategic effort to reinvigorate its drug discovery capabilities. The company aims to become more agile, efficient, and effective in delivering viable drug candidates to the clinic.

3. Novartis is reducing its U.S. workforce by 427 employees at its headquarters in East Hanover, New Jersey. This follows previous cuts of 330 employees in December 2024 as part of site closures in Germany and Boston.

4. Galapagos, a Belgian biotech company, announced plans to split into two entities and cut 40% of its workforce, affecting about 300 employees across its European operations. The company will close its site in France and decrease staff in Belgium.

Impact on Research and Development

As pharmaceutical companies streamline their operations, many are reevaluating their research and development priorities. For instance:

• Intellia Therapeutics is reducing its workforce by 27% and discontinuing the development of its NTLA-3001 therapy for alpha-1 antitrypsin deficiency-associated lung disease. The company will focus on its lead programs NTLA-2002 for hereditary angioedema and nexiguran ziclumeran for transthyretin amyloidosis.

• IGM Biosciences is cutting 73% of its workforce and halting development of two autoimmune drug candidates, imvotamab and IGM-2644.

• CytomX Therapeutics is reducing its staff by 40% to focus resources on its clinical programs, particularly the development of CX-2051, an antibody-drug conjugate for advanced metastatic colorectal cancer.

These restructuring efforts reflect the industry's ongoing challenges, including declining COVID-19 vaccine sales, regulatory pressures, and the need to allocate resources more efficiently in a competitive market.