USA — Amgen Inc has announced its plans to cut 450 jobs, which constitutes less than 2% of its workforce.
This marks the company’s second round of layoffs this year, reflecting the intensifying pressure on drug prices and high inflation.
The reason cited by the California-based drugmaker is organizational changes to its commercial team, which is speculated to involve a shift towards digital marketing tools in the long run.
As per its latest annual regulatory filing with the U.S. Securities and Exchange Commission, Amgen had a workforce of approximately 25,200 employees in more than 50 countries as of Dec. 31, 2022.
A report shows that layoffs by U.S. companies over January and February this year reached their highest levels since 2009.
Amgen’s decision to reduce its workforce highlights the impact of rapidly increasing interest rates on the healthcare industry.
In January, Amgen downsized its workforce by approximately 300 employees as part of organizational changes.
The drugmaker’s fourth-quarter revenue experienced a slight decline as a 4% increase in sales of its own drugs was offset by lower revenue from its deal to manufacture COVID-19 antibody treatments for Eli Lilly.
Rising wave of layoffs
The pharmaceutical sector has recently seen a surge in layoffs. The pharmaceutical and life-sciences sector laid off 7,387 employees in 2022, as per data from Challenger, Gray & Christmas Inc.
In January, the sector saw 1,449 layoffs, up from 174 the previous year, according to Challenger.
So far this year, 19 drug developers have declared plans to lay off staff, as reported by FierceBiotech, a trade publication.
Cyteir Therapeutics Inc. announced last month that it will be downsizing its workforce by 70% and terminating development of all drugs except its lead product for ovarian cancer treatment.
The decision was made due to concerns about raising additional funding later this year. Cyteir’s Chief Executive Markus Renschler explained that the cost-cutting measures will enable the company to remain operational until 2026.
US-based Finch Therapeutics has reduced its workforce by 37% and stopped a preclinical program due to Takeda’s decision to sever ties with the microbiome drug developer.
Similarly, Darmstadt in Germany has let go of 133 jobs in Billerica, Massachusetts, U.S., equating to approximately a 26% decrease in staff in Billerica and an 11% decrease in its US-based EMD Serono employee base, as part of a restructuring effort.
Thermo Fisher, which saw a two-thirds drop in sales of its COVID-19 tests in 2022, has started laying off hundreds of workers at three manufacturing sites in California.
Media reports suggest that the company is permanently eliminating a total of 230 jobs at these sites to improve efficiency and stay in line with current manufacturing volume demands.
CDMO Abzena, based in the UK, has recently laid off 66 employees in San Diego after hiring a new CEO.
In addition to these, Johnson and Johnson and its subsidiary Janssen Biotech are overhauling operations for the infectious diseases and vaccine groups, resulting in employee layoffs.
Mayank Chandra, Managing Partner at Antal International, a global recruitment firm, has noted that layoffs generally involve underperformers and help streamline the talent pool.
In some cases, restructuring in redundant or low-revenue business units has led to substantial layoffs.
Despite the ongoing layoffs in the pharmaceutical industry, there is some positive news. Massachusetts-based biotechnology company Moderna, known for its mRNA COVID-19 vaccine Spikevax, is planning to expand its workforce.
The company’s new Chief Technical Operations Officer expects this to be just the beginning, as Moderna sets its sights on potential launches beyond its flagship vaccine. In 2023, Moderna aims to hire approximately 2,000 new employees.
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