Since 2022, there has been a significant surge in layoffs by pharmaceutical and biotech companies. While this trend continued into 2024, the industry showed signs of stabilization in the last four months of the year with the pace of layoffs slowing down.
Nonetheless, 2024 was a
challenging year. Data compiled by PharmaCompass indicates
that over 25,000 layoffs were announced in 2024, driven by economic pressures, failed clinical trials, and strategic pivots.
Bristol Myers Squibb and Johnson & Johnson led the layoffs with about 2,300 job cuts each. Bayer announced
elimination of 1,800 positions.
View Our Interactive Dashboard on Biopharma Layoffs in 2024 (Free Excel Available)
US, Europe, China bear brunt of job cuts; Big Pharma hands pink slips to
10,000
Over 190 biopharma companies announced layoffs in 2024. The year began on a grim note — 27 firms announced significant job cuts in January 2024. By the yearend, Big Pharma alone had contributed more than 10,000 layoffs to the year’s total of over 25,000.
Novartis announced over 1,200
job cuts in 2024. It eliminated 330 jobs after it acquired German biotech MorphoSys through the closure
of sites in Munich and Boston. Similarly, Bayer announced significant
reductions at its US and Swiss facilities.
North America saw increased
retrenchments, especially at biotech hubs such as Boston, San Diego, and New
Jersey. Massachusetts, with Boston and Cambridge as the epicenter of US
biotechnology, saw around 4,000 layoffs, with companies like Relay Therapeutics, Editas Medicine, and Takeda driving
the numbers.
In San Diego, workforce reductions by Takeda, and Bavarian Nordic collectively resulted in over 900 job losses,
significantly impacting the local biotech ecosystem. New Jersey was subject to
broader restructuring efforts with BMS and Bayer contributing nearly 1,500 layoffs.
The impact in Europe was equally severe. Germany, home to some of the world’s largest pharmaceutical companies, saw over 2,500 layoffs as Bayer and Boehringer Ingelheim scaled
back operations. Novartis’ decision to shut down its Munich site added hundreds more to the tally.
In Switzerland, Idorsia eliminated 270 positions. Dutch biotech UniQure reduced its
workforce by 65 percent (around 300 jobs).
That included the sale of a Massachusetts
manufacturing facility to Genezen. Denmark also felt the strain, with Leo Pharma cutting 250 roles as
part of a strategic revamp.
China emerged as another
focal point of workforce reductions in 2024. Global pharmaceutical giants, such
as Merck and Johnson & Johnson, restructured their operations in response to market complexities in the region. Local companies such
as Connect Biopharma, which is
transitioning to a US-focused company, also scaled back their presence in
the country.
View Our Interactive Dashboard on Biopharma Layoffs in 2024 (Free Excel Available)
Amylyx, FibroGen, Lyra, Athira drastically reduce staff over setbacks in
clinical trials
Clinical trial failures were one of the most significant drivers of layoffs in 2024.
For instance, Amylyx Pharmaceuticals faced a devastating blow when its amyotrophic
lateral sclerosis (ALS) therapy, Relyvrio, failed a
confirmatory trial. This led to a 70 percent reduction in its workforce,
leaving only 100 employees from the 384 full-time staff reported at the end of 2023. The company’s decision to pull the therapy from the market compounded the layoffs.
BioMarin Pharmaceutical had to reduce its workforce, as it streamlined its pipeline in response to trial challenges. In August, the company announced a reduction of 225 employees, citing “organizational redesign efforts”. These layoffs followed 170 redundancies announced earlier in
May.
FibroGen, once considered a
leader in oncology drug development, was among the most heavily impacted. The
high-profile failure of its anti-CTGF antibody in two late-stage cancer trials
led to the discontinuation of its lead candidate, resulting in a 75 percent reduction in its US workforce.
Lyra Therapeutics also implemented a 75 percent workforce reduction,
affecting 87 employees, after its chronic rhinosinusitis program struggled.
Similarly, Athira Pharma cut 70 percent of its team after its Alzheimer’s candidate failed a phase 2/3 trial.
View Our Interactive Dashboard on Biopharma Layoffs in 2024 (Free Excel Available)
Cash crunch, mergers compel Kronos Bio, Editas, Vincerx, Gilead to
downsize
In addition to clinical
failures, funding constraints played a pivotal role in reshaping the biotech
landscape. Kronos Bio stood out as one of
the hardest-hit firms, cutting 21 percent and 83 percent of its existing workforce in March and November, respectively, as it sought to divest assets and conserve cash.
Editas Medicine’s inability to secure partnerships for its sickle cell program forced the company to revert to preclinical research, resulting in a 65 percent workforce reduction.
The trend of scaling back R&D pipelines was particularly evident among biotechs struggling to advance preclinical programs to clinical trials. Boundless Bio and Senti Bio exemplified
this, choosing to focus on a handful of
promising candidates, while reducing discovery efforts.
Consolidation often results
in overlapping roles, leading to inevitable workforce reductions. Apart from
the MorphoSys layoffs by Novartis, Vincerx Pharma faced
job losses after it got acquired by
Oqory (a clinical-stage ADC company). Vincerx had to cut its workforce by 55 percent.
Amid ongoing reorganization
efforts, Gilead closed its Seattle,
Washington (US), office and laid off 72 employees of its subsidiary Kite Pharma. Gilead also
announced that its Kite facility in Philadelphia, Pennsylvania (US), would
close by mid-2025. That was followed by 104 additional layoffs at its California headquarters. In April, it had cut 58 jobs in California.
Gilead also announced that its Kite
facility in Philadelphia would close by mid-2025.
Vir Biotechnology reduced its
workforce by 25 percent (i.e. 140 layoffs)
to focus on its hepatitis program, and GlycoMimetics let go of 80 percent of its workforce
after the FDA demanded an additional clinical trial for its leukemia treatment.
Meanwhile, Lexicon Pharmaceuticals reduced its workforce by 60 percent after it stopped
commercial operations and transitioned back to being a clinical stage company.
View Our Interactive Dashboard on Biopharma Layoffs in 2024 (Free Excel Available)
Our view
It takes decades to build
innovation ecosystems. The concentration of layoffs in major biotech hubs has
raised concerns about the potential long-term impact on these ecosystems.
In 2025, the key challenge will be to maintain the momentum of innovation, as organizations operate with a leaner workforce and a more focused pipeline.
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