Over
the last two years, there has been a significant surge in layoffs by
pharmaceutical and biotech companies. The trend spilled over to 2024. Data
compiled by PharmaCompass indicates that between January and early-September, around 150 companies had implemented layoffs.
Bristol Myers Squibb (BMS) tops the list of
companies that downsized, with a staggering 2,284 job cuts. Bayer stood second at 1,816
retrenchments, followed by Takeda Pharmaceuticals at 1,155. Johnson & Johnson’s spin-off Kenvue is slashing
over 1,000 jobs this year, while Roche subsidiary Genentech is cutting 529 positions,
and Novartis is going ahead with its
multi-year restructuring, and cutting another 770 jobs.
One of the primary drivers of layoffs has been the need for companies to streamline operations and reduce costs. Many firms have faced financial pressures due to reasons such as declining revenues, increased competition, and the high costs associated with drug development.
The current wave of layoffs has encompassed geographies – from traditional pharma strongholds like New Jersey, biotech hubs in Massachusetts and California, to Europe (particularly Germany and Switzerland).
This
is not to suggest that job cuts are a norm. Certain segments have been
experiencing substantial growth and job creation. This includes companies like Eli Lilly and Novo Nordisk that have experienced remarkable growth due to the efficacy of their glucagon-like peptide-1 (GLP-1) receptor agonists, a class of drugs that treats type 2 diabetes and obesity.
View Our Interactive Dashboard on Biopharma Layoffs in 2024 as of Sept. 7 (Free Excel Available)
BMS cuts 2,284 jobs to meet
cost targets, Bayer hands pink slips to 1,816 employees
Several
large drugmakers have announced job cuts this year in order to meet their cost
cutting goals, or as part of their restructuring exercise.
BMS’ revenue had declined from US$ 46.2 billion in 2022 to US$ 45 billion in 2023. The financial pressure has compelled
it to cut 2,284 jobs so far in this year, a move that sent shockwaves through the industry. Overall, BMS hopes to save approximately US$ 1.5 billion in costs by 2025 through this “strategic productivity
initiative”.
In Europe, Swiss-based companies like Novartis and Roche have announced substantial job cuts, while Bayer is reducing its workforce globally.
Bayer is laying off 1,816 employees
worldwide, including 150 in Basel, Switzerland. A majority of these are management roles as the
German drugmaker seeks to target € 500 million (US$ 557 million) in cost savings in 2024 and € 2 billion (US$ 2.23 billion) in 2026.
Japanese
drugmaker Takeda plans to eliminate 1,155 positions, including 324 jobs in San Diego and 641 in Massachusetts. Takeda is also winding down production and R&D operations in Austria, resulting in 190 job losses.
Starting
next month, Genentech, a Roche subsidiary, will lay off 93
employees in San Francisco. Earlier this year, Genentech trimmed roughly 3
percent of its workforce across several departments, impacting 436 employees.
Roche also laid off around 340 employees in its product development
team.
Novartis has been undergoing a
significant restructuring exercise since 2022, when it announced 8,000 job cuts in its global workforce.
This year, it announced an additional 770 job cuts in its product development
organization, separate from the previous reductions. Once again, it was workforces in
Switzerland (440 job cuts) and US (269 job cuts) that bore the brunt.
Tylenol and Band-Aid maker Kenvue,
which spun off from J&J last year, announced plans
to cut 920 jobs, representing about 4 percent of its global workforce.
Additionally, the company will lay off 51 employees in New Jersey and 84 in California. These layoffs are part of Kenvue’s efforts to adjust its cost structure and become more competitive.
View Our Interactive Dashboard on Biopharma Layoffs in 2024 as of Sept. 7 (Free Excel Available)
Perrigo, Emergent Bio,
Catalent, BioMarin trim workforces amid strategic shifts
Several mid-size companies too are under tremendous cost pressures, with some of them feeling the need to reinvent themselves for the future.
In
February this year, Perrigo had embarked on ‘Project Energize’, a three-year initiative aimed at boosting organizational agility and achieving long-term success. As part of this project, Perrigo is cutting costs and laying off 6 percent of its staff, which
translates into nearly 550 employees.
CDMO-turned-biopharma Emergent BioSolutions plans to reduce its
workforce by about 300 employees. The Maryland-based
multinational is closing its Baltimore-Bayview drug
substance manufacturing facility and its Rockville drug product facility in the
state.
Rare
disease biotech BioMarin laid off 395 employees globally, about 12 percent of its workforce, as part of “organizational redesign
efforts” to prioritize its new strategy with its hemophilia A gene therapy Roctavian and to preserve cash.
Drug-delivery
specialist Catalent has also been significantly
impacted by restructuring efforts ever since it announced 1,100 layoffs in December. It had then attributed its fall in revenue to declining Covid-related sales, but had also noted that future GLP-1 manufacturing revenues could help stabilize its finances. True enough — it subsequently announced that it is in the process of
being acquired by Novo Nordisk’s parent company for US$ 16.5
billion. However, Catalent reported reducing its headcount by an additional 300 in the fourth quarter of
2023.
View Our Interactive Dashboard on Biopharma Layoffs in 2024 as of Sept. 7 (Free Excel Available)
Pfizer job cuts continue to
trickle in; Lykos, Lyra downsize after pipeline setbacks
Clinical trial failures and financial constraints have also played a significant role in this year’s wave of layoffs. At Pfizer, job cuts continued to
trickle in, with some estimates putting the number at 1,500 employees
in 2024. These include 285 at its vaccine R&D site in New York, and 52 in San Francisco. The Comirnaty maker also pulled the plug on a long-anticipated,
near-complete Seagen drug manufacturing plant in Everett, Washington. About 120 employees at the site were let go.
It
has been a tumultuous time for Lykos Therapeutics, following the US Food and Drug Administration’s rejection of its MDMA-assisted therapy for post-traumatic stress disorder. Lykos announced laying off 75 percent of its staff (i.e. 75
employees). Its founder, who had spent 38 years working on the therapy, left
the company and so did its CEO. However, Lykos has not given up and has roped in a Janssen veteran as senior medical advisor to get the therapy past the finish line.
Similarly,
Lyra Therapeutics is laying off 75 percent of its workforce (i.e. 87 employees) following disappointing
late-stage results for its implant to treat chronic rhino-sinusitis. The
retrenchments include its chief technology officer.
View Our Interactive Dashboard on Biopharma Layoffs in 2024 as of Sept. 7 (Free Excel Available)
Our view
Technology, regulatory and pricing pressures are shaping strategies of pharmaceutical companies. The drive to do more with less could accelerate the adoption of artificial intelligence, machine learning, and automation in drug discovery and development processes.
The
employment landscape is certainly evolving. We foresee significant changes in
the skills required for pharmaceutical and biotech careers, with a growing
emphasis on data science and computational biology.
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