In 2025, the biopharma industry saw a significant increase in workforce reductions, with approximately 42,700 employees affected by layoffs or projected cuts. This represents a 47.1% rise compared to the previous year, according to data compiled by BioSpace. The number of companies implementing layoffs also grew by 27.6%.
Industry experts point to capital constraints as the primary driver behind these job losses. Eric Celidonio, founder and managing partner of Sci.bio Recruiting, stated via email that "after a wave of early-stage biotech failures, investors rotated out of the sector, which significantly constrained funding." He added that this forced early-stage companies to streamline operations and prompted larger firms to focus on acquiring late-stage assets while reducing nonessential roles.
Audrey Greenberg, venture partner and chair at Mayo, explained that "by 2025, the industry reached an inflection point where delayed workforce and portfolio decisions could no longer be deferred." She noted that many organizations were still operating with cost structures suited for more favorable capital conditions seen in previous years. As financial buffers disappeared in 2025, companies had little choice but to act.
Greenberg further highlighted “trapped capital” as a key factor: "Investment dollars were locked inside companies that could not advance programs, access the public markets, or reach meaningful value inflection." With limited opportunities for biotech IPOs and underperformance in public markets throughout much of the prior cycle, mergers and acquisitions became one of the few viable options for liquidity. Companies lacking M&A appeal or near-term catalysts extended their runway through staff reductions.
Artificial intelligence (AI) also influenced workforce changes but played a secondary role. Greenberg observed that as AI tools increasingly support functions such as discovery and regulatory work, leadership teams are reconsidering staffing needs: "In a capital-constrained environment, that reassessment favored leaner operating models and reduced the urgency to backfill roles."
Seven major biopharma firms each announced or reported layoffs affecting at least 1,000 employees during 2025:
- Bayer cut about 4,450 positions in the first three quarters.
- Bristol Myers Squibb disclosed plans impacting around 1,450 employees.
- Teva Pharmaceuticals announced it would reduce its workforce by about 2,900 people globally by 2027.
- Merck revealed plans for approximately 6,000 job cuts over multiple years.
- CSL said it would part ways with roughly 4,350 employees.
- Novo Nordisk planned global reductions totaling about 9,000 jobs.
- Novartis was set to lay off around 1,069 workers.
The third quarter was particularly active due to large-scale cuts at Bayer, CSL, Merck and Novo Nordisk. However, fourth-quarter layoffs dropped sharply—affecting just over half as many workers compared to Q4 of the previous year.
California and Massachusetts experienced the highest concentration of layoffs among U.S. states; California had announcements from 58 companies while Massachusetts saw cuts from 56 firms. New Jersey followed with reports from twelve companies. In total across fourteen states—primarily on the East Coast—layoffs occurred throughout various cities.
Looking ahead into this year (2026), both Celidonio and Greenberg expect layoff rates will decline rather than continue at last year's pace. Celidonio predicted stabilization along with potential modest increases in hiring: "Rates are coming down...and a new climate of fiscal discipline combined with growth in areas like data science [and] AI...should support some improvement in 2026." Greenberg concurred: "As capital starts to circulate again," she said,"the pressure for indiscriminate cuts should ease," though she anticipates ongoing targeted adjustments reflecting continued technology adoption.
BioSpace's methodology excluded contract development/manufacturing organizations and other related sectors from its tally; numbers were based primarily on official company disclosures and regulatory filings.
