Pharmaceutical Industry Faces Widespread Layoffs and Restructuring Amid Challenging Market Conditions

The pharmaceutical and biotech industries are experiencing a significant wave of layoffs and restructuring efforts as companies grapple with challenging market conditions, pipeline setbacks, and the need to reallocate resources. Major players and smaller biotechs alike are trimming their workforces to extend cash runways and focus on priority programs.

Big Pharma Cuts Thousands of Jobs

Several pharmaceutical giants have announced substantial workforce reductions in recent months. Novo Nordisk revealed plans to cut approximately 9,000 employees globally, including around 5,000 in Denmark, as part of a restructuring initiative aimed at generating $1.25 billion in annualized savings through 2026. The 11% headcount reduction began immediately and is expected to impact various departments, including HR, clinical development, marketing, and sales.

Merck projected it could let go of about 6,000 employees as part of a multiyear process, affecting around 8% of its global workforce. The $3 billion cost-cutting push will involve eliminating administrative, sales, and research and development roles to support the launch of up to 20 new products.

Bristol Myers Squibb continues its aggressive cost-cutting campaign, with recent layoffs of 282 employees in Lawrenceville, New Jersey. The company has now let go of 1,223 people in Lawrenceville since April 2024 as part of its efforts to save $3.5 billion through 2027.

Biotech Startups Face Difficult Decisions

Smaller biotech companies are also feeling the pressure, with many forced to make difficult decisions about their workforces and pipelines. Generation Bio announced plans to shed 90% of its workforce amid a cash crunch that could render the biotech unable to support clinical development for its lipid nanoparticle platform. The strategic restructuring is set to happen in phases from mid-August through the end of October.

Abata Therapeutics, which made it to BioSpace's 2025 Best Places to Work list, is winding down its operations due to the challenging fundraising environment. The startup, which launched in 2021 with $95 million in initial funding, was developing regulatory T cell therapies for autoimmune and inflammatory conditions.

Century Therapeutics is laying off 51% of its employees in a bid to "right size" the company. The Philadelphia-based biotech expects the layoffs to be "substantially" complete by the third quarter, alongside which the company will incur around $3.7 million in one-time costs associated with employee severance and benefits.

Pipeline Prioritization and Strategic Realignment

Many companies are using layoffs as an opportunity to refocus their pipelines and realign strategic priorities. Sarepta Therapeutics announced it will part with around 500 employees after a strategic review and focus its pipeline on "high-impact programs, prioritizing potentially best-in-class siRNA platform assets." The decision came after two deaths linked to the company's Duchenne muscular dystrophy treatment Elevidys.

Rocket Pharmaceuticals is laying off 30% of its workforce in a strategic realignment initiative that also involves focusing resources on its late-stage heart disease programs. The layoffs will allow Rocket to reduce its 12-month cash burn by almost 25%.

4D Molecular Therapeutics is downsizing by 25% of its current and planned roles to better realign its resources. The layoffs will primarily affect staff supporting early-stage R&D activities and allow the company to "drive late-stage execution," according to the announcement.

As the pharmaceutical and biotech industries navigate these challenging times, it remains to be seen how these workforce reductions and strategic realignments will impact drug development pipelines and ultimately affect patients awaiting new treatments. The coming months will likely bring further announcements as companies continue to adapt to the evolving market landscape.