Pharmaceutical Industry Faces Ongoing Layoffs Amid Shifting Priorities

The pharmaceutical industry continues to grapple with widespread layoffs and strategic restructuring as companies navigate a challenging landscape marked by financial pressures and evolving research priorities. Recent developments highlight a trend of workforce reductions across major pharmaceutical firms and biotech companies, with implications for various therapeutic areas and research modalities.

Big Pharma Leads Massive Job Cuts

In a significant move, Novo Nordisk announced plans to lay off 9,000 employees, with more than half of the cuts occurring in Denmark. This restructuring, initiated under new CEO Maziar Mike Doustdar, aims to save approximately $1.3 billion annually by the end of 2026. Similarly, Merck & Co. revealed a sweeping cost-cutting initiative that will result in 6,000 job losses—8% of its workforce—as part of efforts to save $3 billion annually by the end of 2027.

Gene and Cell Therapy Sectors Face Setbacks

The gene and cell therapy fields have been particularly hard hit by recent industry shifts. Sarepta Therapeutics announced a 500-person workforce reduction, representing 36% of its staff, as part of a strategic restructuring to save $400 million annually. This move coincided with growing scrutiny over the company's Duchenne muscular dystrophy gene therapy, Elevidys, following safety concerns and patient deaths.

Biogen officially ended all gene therapy work using adeno-associated virus capsids, resulting in an undisclosed number of layoffs. Arena BioWorks laid off 30% of its workforce as it shifted away from cell and gene therapy work, just 19 months after launching with $500 million in funding. Other companies in this space, including 4D Molecular Therapeutics, Innate Pharma, Generation Bio, Sail Biomedicines, Adicet Bio, and Rocket Pharmaceuticals, have also reported layoffs.

Industry-Wide Trends and Government Impact

The biopharma sector has recorded 190 layoff rounds in the first three quarters of 2025, nearly matching the total of 192 rounds reported for all of 2024. This trend suggests that 2025 is on track to surpass last year's layoff figures significantly.

Adding to the industry's challenges, the Department of Health and Human Services (HHS) announced plans to end mRNA vaccine work funded by the Biomedical Advanced Research and Development Authority. This decision has created uncertainty in the mRNA space, with companies like Moderna implementing layoffs and NextRNA Therapeutics winding down operations.

The recent government shutdown has further complicated matters, with 32,460 HHS employees furloughed. Prior to the shutdown, over 150,000 federal workers across all departments resigned as part of a buyout program, with the HHS alone losing approximately 20,000 employees since the beginning of the current administration.

As the pharmaceutical industry continues to evolve, these workforce reductions and strategic shifts reflect broader challenges in drug development, regulatory pressures, and the ongoing search for more effective and efficient therapeutic approaches.