[Updated on April 25, 2024]
While a number of biotech startups continue to attract healthy funding amounts, the biotech sector continues to see a significant number of layoffs in 2024 with major cuts hitting firms like Amylyx Pharmaceuticals, Novartis, Genentech and Sanofi.
Bristol Myers Squibb (BMS) announced one of the largest workforce reductions of the year thus far, signaling plans to cut roughly 2,200 employees, or about 6% of its employee base. This move is part of a broader restructuring effort that aims to cut $1.5 billion in annual expenses by 2025.
Several other Big Pharma companies have also announced job cuts recently. Novartis plans to cut up to 680 jobs in its development organization over the next two to three years, with about 440 jobs cut in Switzerland and 240 in the U.S., representing about 14% of the 12,500 development roles. Similarly, Genentech announced a significant reduction in its workforce, planning to lay off 436 employees at its headquarters in South San Francisco. Meanwhile, Sanofi is undergoing a “full pipeline reprioritization” effort, resulting in layoffs across the company’s therapeutic areas as part of efforts to simplify its R&D structure. Additionally, Sanofi is restructuring its U.S. commercial vaccine group to improve efficiency and effectiveness in the evolving U.S. vaccine market while BenevolentAI is strategically pivoting to focus on AI-driven drug discovery and proprietary pipeline, cutting about 30% of its employees.
Insights based on company size
Large Companies: So far in 2024, layoffs tend to occur in larger, less frequent bursts at larger companies. When they do happen, such layoffs tend to be significant, reflecting major strategic restructuring or shifts in business operations.
Midsize Companies: Layoffs here tend to be more variable in terms of frequency and size. This pattern indicates a more reactive strategy, often resulting from a mix of strategic adjustments and responses to market conditions or operational needs.
Small Companies: Layoffs at smaller firms often occur in more frequent spikes. This reality reflects the inherent sensitivity of smaller businesses to market fluctuations and the relatively challenging biotech landscape in 2024.
Breaking down layoffs by type
The diagram below categorizes the reasons for layoffs in the biotech and pharma sectors, based on the following criteria assigned based on publicly disclosed statements from the companies. A single layoff could have multiple reasons.
Large and Midsized Companies:
Operational Reorganization: Many large companies, such as Pfizer, Thermo Fisher Scientific and Johnson & Johnson, have resorted to layoffs as part of broader efforts to streamline operations and improve efficiency. Similarly, Big Pharmas like Bayer, Novartis and Bristol Myers Squibb have undergone layoffs to realign their strategic priorities. Several large companies, including Johnson & Johnson and Sanofi, have experienced layoffs in the wake of disappointing clinical trial results or the discontinuation of drug development programs. Midsize companies like Allogene, NanoString Technologies, and Affimed have cut workers largely as a result of similar reasons.
Small Companies:
Small companies like PMV Pharmaceuticals, Rallybio Corporation, and Longeveron have implemented layoffs to focus on their most promising drug candidates and prioritize resources toward key projects. Some small companies, including Aera Therapeutics, Meissa Vaccines, and Catamaran Bio, have experienced layoffs as a result of challenges in securing funding or attracting investments in the current market conditions.
The two U.S. Coasts, Dublin and Basel hit hardest
Massachusetts and California were the epicenters of biotech layoffs in the U.S. this January. In the Greater Boston area, companies like Aera Therapeutics, AlloVir, C4 Therapeutics, and Intellia Therapeutics faced significant biotech workforce reductions, cumulatively accounting for 253 layoffs. In Hayward, California, Lonza let 218 workers go after announcing the closure of a clinical manufacturing site. South San Francisco was next in line, with the clinical-stage gene-engineering firm Allogene Therapeutics, Big Pharma Pfizer and synthetic biology firm Senti Biosciences all announcing layoffs there. Between them, there were a total of 493 layoffs. Illumina is also implementing multiple waves of layoffs throughout 2023 and 2024, comprising 10% of its R&D team. Recent cuts in San Diego affected 111 workers.
Outside of Greater Boston and San Francisco, Ireland and Basel, Switzerland also had a significant number of cuts. The areas with the most layoffs include the following:
- Basel: 835 layoffs
- Cambridge: 593 layoffs
- Dublin: 550 layoffs
- Marlborough: 400 layoffs
- South San Francisco: 389 layoffs
- San Diego: 329 layoffs
- Jersey City: 300 layoffs
- Pearl River: 285 layoffs
- Gaithersburg: 239 layoffs
- Emeryville: 233 layoffs
Summary of the most recent layoffs
Many of the layoff totals were estimated based on available percentages of the workforce reductions paired with the most recent available total employee numbers:
Filed Under: Biotech