Pharmaceutical Industry Faces Continued Layoffs and Restructuring Amid Market Challenges

The pharmaceutical and biotech sectors continue to grapple with widespread layoffs and strategic realignments as companies adapt to challenging market conditions and shifting priorities. Recent weeks have seen numerous firms announce workforce reductions and pipeline adjustments in efforts to extend cash runways and focus resources on key programs.

Major Players Trim Headcount to Cut Costs

Several large pharmaceutical companies have disclosed plans for significant staff reductions. Novartis announced it will lay off 427 employees at its U.S. headquarters in East Hanover, New Jersey between June and October. This follows the company's December 2024 decision to cut 330 jobs as part of closing sites in Germany and Boston acquired from MorphoSys.

Meanwhile, Bristol Myers Squibb revealed an additional $2 billion in planned savings through 2027, on top of an ongoing $1.5 billion cost-cutting program. The company will reduce its Lawrenceville, New Jersey workforce by 223 employees between May and August, bringing total layoffs at that location to 290 this year. BMS cited efforts to become a "leaner, more efficient company while investing behind growth brands and promising areas of science."

Bayer also continues to trim its global headcount, with CEO Bill Anderson stating that about 2,000 employees were let go in the first quarter of 2025. This brings total job cuts to around 11,000 since Bayer initiated a major reorganization in July 2023. Anderson noted the changes have made the company "leaner, faster and more productive."

Biotech Firms Restructure Amid Funding Challenges

Smaller biotech companies have been particularly impacted by the difficult funding environment, with many announcing major restructurings to preserve cash.

Atara Biotherapeutics disclosed plans to cut about 50% of its workforce after the FDA rejected its T cell therapy Ebvallo and placed clinical holds on its programs. The layoffs could leave Atara with around 80 employees as it evaluates next steps.

Generation Bio announced a 20% staff reduction in Cambridge, Massachusetts as it reorganizes to support clinical development of T cell-directed medicines. The cuts follow a 40% workforce reduction in 2024, potentially leaving the company with about 83 employees.

In one of the most drastic moves, IGM Biosciences revealed it will lay off 73% of its staff, affecting 100 employees. The company is halting work on two autoimmune drug candidates and exploring strategic alternatives to maximize shareholder value.

Companies Refocus Pipelines and Resources

Beyond headcount reductions, many firms are reevaluating their pipelines and research priorities to concentrate on high-potential programs.

Intellia Therapeutics announced it will cut 27% of its workforce, about 142 employees, as it focuses resources on lead gene editing candidates NTLA-2002 for hereditary angioedema and nexiguran ziclumeran for transthyretin amyloidosis. The company is discontinuing development of NTLA-3001 for alpha-1 antitrypsin deficiency-associated lung disease.

CytomX Therapeutics is reducing staff by 40%, or 46 employees, to direct capital toward clinical programs. The company's top 2025 priority is developing antibody-drug conjugate CX-2051 for advanced metastatic colorectal cancer.

In a major strategic shift, Galapagos plans to split into two entities by mid-2025 and cut 40% of its workforce, affecting about 300 employees across Europe. The company will close its French site, decrease staff in Belgium, and discontinue its small molecules program to focus on cell therapies.

The ongoing industry-wide restructuring reflects persistent challenges in the biopharma sector, as companies work to streamline operations, extend cash runways, and allocate resources to their most promising pipeline assets. While painful in the short term, these moves aim to position firms for long-term success in bringing innovative new therapies to patients.