Layoffs are a fact of life in the pharma and biotech industries with companies frequently adjusting headcount as their priorities shift. But the steady stream of cuts grew stronger last year as various market uncertainties forced companies into sink-or-swim situations.
In 2024, the pharma industry axed 14,010 jobs — an uptick from the 12,859 jobs lost the year before, according to estimates by Challenger, Gray & Christmas, an outplacement and executive coaching company.
Now, looking broadly across the U.S., the job loss picture is even more grim. Amid a downsizing push in government workforces, the U.S. shed over 172,000 jobs in February — the highest recorded monthly total since 2009, Challenger, Gray & Christmas reported last week. The sharp rise in layoffs was driven by the dramatic cuts in the government sector, which erased 62,242 jobs during the month.
And any of the former federal employees who lost a job at a healthcare agency and might come looking for work in the private pharma sector face an industry with challenges of its own.
So far this year, no type of company has been immune to layoffs, which have hit pharmas of all sizes and in various therapeutic niches.
Yet, some trends have already emerged in this year’s layoff climate. A look at the companies weathering staff cuts illuminates some of pharma’s ongoing changes.
Restructuring and spinoffs
Facing patent cliffs and wider economic uncertainty, several large pharmas are undergoing long-term restructuring efforts that are triggering job losses.
Bristol Myers Squibb shed more than 2,000 from its staff in 2024 and is continuing cuts this year as part of a plan to achieve $2 billion in cost reductions by the end of 2027. This month, the company reported that 57 staffers at a California facility specializing in the tumor microenvironment will get the axe. The company also nixed over 200 employees in New Jersey in February.
Alzheimer’s drug development partners Eisai and Biogen are also revamping their companies as the pair’s approved treatment Leqembi experiences sluggish sales.
Cuts at Japan-based Eisai will impact about 7% — or 120 positions — as it restructures its workforce, the company said in February. The reductions will sweep across a broad range of functions and trim its U.S.-based workforce by about 60 employees.
Biogen has also been undergoing far-reaching layoffs since 2023 and reduced its R&D staff in January by an undisclosed amount to better align with a renewed focus on preclinical candidates.
Sales for Leqembi grew in 2024 and were on track to hit $279 million by the end of the year, Eisai reported in November. But the company also lowered its forecast for the Alzheimer’s treatment, which has faced coverage challenges and ongoing skepticism about safety and efficacy.
Galapagos is also hoping a major restructuring will reverse its fortunes.
Since its launch in the late 1990s, the Belgian company has attracted a fair amount of biotech buzz thanks to its broad pipeline and innovation aims; its 10-year research collaboration with Gilead; and its decision to hand the CEO reins to Dr. Paul Stoffels, a well-known former Johnson & Johnson executive, in 2022.
But the company has also been hit with setbacks and has only scored regulatory wins for one drug — a rheumatoid arthritis JAK inhibitor called Jyseleca that in 2022 was given the nod in the EU, U.K. and Japan. In the U.S., however, the FDA rejected the blockbuster hopeful due to toxicity concerns.
With the company’s pipeline now dominated by CAR-T cell therapy candidates in oncology and small molecules in immunology, Galapagos announced this year that it plans to split into two entities. Galapagos will continue developing its pipeline, while a new, publicly traded entity will bring in new assets through transactions.
The change will eliminate about 300 positions in Europe — or 40% of the company’s workforce, Reuters reported.
Cell and gene therapy struggles
The investment landscape for cell and gene therapies looked considerably dryer last year compared to a COVID-era boom. Yet, toward the end of 2024, the winds were shifting again. Halfway through the year, about $11 billion had been funneled into the space. Although the pace was lower than the $22.7 billion peak in 2021, investments were on track to outstrip the year before.
Much of the cash infusion was aimed at later-stage assets, leaving the environment “challenging” for startups with preclinical candidates, the CEO of the Alliance for Regenerative Medicine said at a conference in October.
At the same time, clinical-stage companies have also grappled with a mix of R&D and manufacturing-related setbacks.
Earlier this month, Atara Biotherapeutics reported in an SEC filing that it’s cutting half its workforce.
The company scored an EU approval of an off-the-shelf T cell therapy treatment for an ultra-rare blood cancer in 2022 and was gunning for an FDA nod. Instead, the agency rejected the treatment in January after an inspection of a third-party manufacturing facility turned up issues. The company said at the time that if it couldn’t find more funding it would have to cut expenses.
In addition to the staff reduction, Atara is also now halting development for two CAR-T cell therapy candidates, including an allogeneic treatment it had hoped could become one of the first treatments using the technology in the autoimmune space. The most recent cuts followed two other rounds of layoffs at Atara — one that shrunk the headcount by 25% last year and a 20% cut in 2022.
And even cell and gene therapy developers that have won approvals have faced commercialization challenges tied to the cost and complexity of the treatments.
CRISPR Therapeutics, which scored the first FDA approval for a CRISPR-based therapy along with partner Vertex Pharmaceuticals, is now slashing an undisclosed number of positions, according to reports. The news follows a reduction in headcount that hit about 50 jobs at the company in 2023 and comes amid broader cuts in the CRISPR drug development space, which has experienced a 50% plummet in stocks over the last year, STAT recently reported.
The lengthy process involved in administering CRISPR’s approved gene editing therapy for sickle cell disease has slowed its launch on the market. Just 50 patients had begun the process of cell collection for the therapy, Casgevy, according to the company’s fourth-quarter earnings report last year.
Several other biotechs specializing in cell or gene therapies have also cut staff or closed shop this year, including Passage Bio, Notch Therapeutics and Spotlight Therapeutics.
