Job cuts continue to climb and pervade the biopharma sector this year, defying hopes that 2024 marked a peak.
After shedding more than 14,000 jobs in all of 2024, the industry surpassed 13,000 layoffs by July 2025, a 31% year-over-year increase at the halfway mark. And the tide of pink slips has continued to rise this summer.
In August, Merck & Co. laid off 58 employees at its New Jersey site as part of a plan to reduce 8% of its global workforce, which could ultimately put 6,000 people out of a job in the next few years. Bayer, Bristol Myers Squibb, Moderna, Tune Therapeutics and Genentech also announced workforce reductions.
As the industry grapples with patent cliffs, stubborn investment and pressure to streamline operations, the upward trend may persist.
The driving factors
Layoffs in 2025 are the result of both traditional factors and brand new ones.
“Pipeline rationalization, late-stage trial failures and the shift to bring more manufacturing back to the U.S. are shaping this year’s layoff patterns,” Ashley Finney, senior vice president of business development and recruiting at Bench on Demand, said in an email. Companies face added pressure as drug safety concerns and reduced federal support threaten some programs.
“Even promising assets can be shelved if funding evaporates or regulatory pathways grow uncertain,” Finney said.
“Advanced clinical programs missing key endpoints remain a common trigger for cuts in our industry.”
Ashley Finney
SVP, business development and recruiting, Bench on Demand
Some drugmakers have already made cuts as the winds shift. Moderna announced an 800-person layoff in July, part of a broad plan to slash 10% of its workforce to adjust for declining COVID-19 vaccine uptake and sluggish sales of its RSV vaccine.
The company is also contending with broader changes to the regulatory landscape. New public health leadership in the U.S. has introduced more stringent approval criteria for COVID-19 vaccines and terminated funding for multiple mRNA vaccine programs, including Moderna’s bird flu project. Potential tariffs and topsy turvy regulations could also affect the market moving forward, Finney said.
Historical trends continue
Despite the choppy waters stirred by market uncertainties, most layoffs in 2025 are tied to strategic realignment, according to Finney.
“Companies are doubling down on core therapeutic areas and high-potential pipelines while cutting programs that fall outside their long-term focus,” she said. “Advanced clinical programs missing key endpoints remain a common trigger for cuts in our industry.”
This was the case for a number of this summer’s headcount adjustments. In August, PureTech’s startup Vedanta Biosciences announced plans to lay off nearly a fifth of its staff after the microbiome-targeting ulcerative colitis treatment VE202 failed in a phase 2 trial. Other companies, including Merck, are streamlining to save money and cushion the blow as major drugs like Keytruda move off patent and face biosimilar competition.
Bayer has also been cutting staff over the past two years, and the company’s CEO Bill Anderson said more layoffs will be coming in the next 18 months. Bristol Myers continued planned reductions, laying off 1,000 employees in the first part of the year, and Tune Therapeutics will trim a quarter of its workforce to streamline operations, despite raising $175 million at the start of the year.
The onslaught isn’t limited to just one type of company — biotech and pharma companies of all sizes have laid off workers, but the underlying reasons behind them vary, Finney said.
“While both face product-related reductions, pharma layoffs are often driven by pipeline prioritization and operational efficiency, whereas biotech is more vulnerable to funding shortfalls and stalled IPO markets,” she said.
Even promising data can’t save jobs. Generation Bio slashed its workforce by 90% due to cash constraints despite positive preclinical results for its platform that targets T-cell-driven autoimmune diseases.
Other companies like Fate Therapeutics have made cuts with hopes of extending the cash runway, nixing 12% of its workforce. As the year continues, more companies may be forced to cast off additional ballast.
“Without a rebound in financing, which is the lifeblood of biotech, restructuring across both sectors is likely to continue well into next year,” Finney said.
