Pharmaceutical Industry Faces Continued Restructuring and Layoffs Amid Strategic Shifts

Novartis Announces Major Manufacturing Changes in Switzerland and US

Novartis has unveiled plans for significant manufacturing changes that will impact hundreds of jobs across its global operations. The Swiss pharmaceutical giant will eliminate 550 positions at its Stein, Switzerland facility by the end of 2027 as it discontinues production and packaging of tablets and capsules at the site. This move comes as part of a $26 million automation overhaul aimed at boosting productivity.

Simultaneously, Novartis will invest $80 million in its Schweizerhalle facility to enhance siRNA manufacturing capabilities, creating approximately 80 new jobs by the end of 2028. Steffen Lang, Novartis' president of operations, emphasized the need to "focus on investing in innovative manufacturing technologies and a high degree of automation" to maintain competitive production in Switzerland.

These changes follow closely on the heels of Novartis' announcement last week detailing plans for a new "flagship manufacturing hub" in North Carolina. The $771 million investment will establish facilities specializing in biologics production and sterile packaging, creating 700 new jobs. This expansion is part of Novartis' broader $23 billion commitment to grow its US presence over the next five years, a move that aligns with other pharmaceutical companies' efforts to avoid potential tariffs imposed by the Trump administration.

Industry-Wide Workforce Reductions Continue

Novartis is not alone in implementing significant workforce changes. The pharmaceutical sector has seen a wave of layoffs and restructuring efforts in recent months:

• Merck announced plans to reduce its global workforce by approximately 6,000 employees, representing about 8% of its total staff. This multi-year process is part of a $3 billion cost-cutting initiative aimed at supporting R&D efforts and facilitating the launch of up to 20 new products.

• Sarepta Therapeutics is cutting around 500 jobs, more than a third of its workforce, following a strategic review. The layoffs affect employees across Massachusetts, Ohio, and North Carolina. This restructuring comes in the wake of safety concerns surrounding its Duchenne muscular dystrophy treatment Elevidys.

• GSK continues its workforce reduction efforts, recently laying off 150 employees in Cambridge, Massachusetts. The company is also trimming its global R&D team, though the exact number of affected positions remains undisclosed.

• Moderna announced a 10% reduction in its global workforce, impacting hundreds of employees. CEO Stéphane Bancel described the decision as part of a broader cost-cutting strategy in response to a "challenging funding environment."

These layoffs reflect ongoing challenges in the pharmaceutical industry, including pricing pressures, pipeline setbacks, and the need to reallocate resources towards promising new therapies and technologies.

Strategic Shifts and Pipeline Prioritization

As companies navigate a complex landscape of clinical development, regulatory challenges, and market dynamics, many are reevaluating their strategic priorities:

Takeda has announced it will cease investment in cell therapies, leading to the layoff of 137 employees. The company is looking to divest its cell therapy platform to an external partner while focusing resources on other areas of its pipeline.

Century Therapeutics is reducing its workforce by 51% as part of an effort to "right size" the company and concentrate on programs with the highest potential for "transformational value." This restructuring follows the termination of its collaboration with Bristol Myers Squibb in December 2024.

These strategic shifts underscore the industry's ongoing need to balance innovation with financial sustainability, often resulting in difficult decisions regarding workforce and pipeline management.