The biopharma industry is taking heavy hits, as one of the biggest names in the industry over the last few years has also been resorting to job cuts. The Moderna layoffs add to the concerns surrounding the research and development of lifesaving drugs as the company is now scaling back the number of workers, particularly in its R&D team, to cut costs. The Moderna R&D cuts in 2025 are expected to affect 10% of the workforce, with the company looking to employ “fewer than 5,000 colleagues,” according to CEO Stephane Bancel.
Moderna’s restructuring efforts are a part of the company’s efforts to reduce its operating costs by around $1.5 billion in the next two years, and this isn’t the first attempt the company has made to bring down its expenditure. Part of the biotech firm’s struggles stems from the declining sales of the COVID-19 vaccine, stemming from both the reduced need for its use and changing regulations that no longer encourage its widespread use. As Moderna reduces its workforce, we ask ourselves, will the industry be starkly altered in the coming years as the trust in vaccines and drug treatment is slowly eradicated?
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The Moderna Layoffs Spell Big Change for the Company and the Industry at Large
As previously stated, the plan with the Moderna layoffs is to cut 10% of its global workforce to bring down the headcount to below 5,000 employees and cut overall costs by $1.5 billion in the next two years. The company expects its operating costs to fall between $4.7 billion and $5 billion for 2027, according to Reuters. Moderna had around 5,800 full-time employees spread across 18 countries as per records from December 31, 2024, but this should change significantly in the immediate future.
“We’ve made significant progress by scaling down R&D as respiratory trials conclude, renegotiating supplier agreements, and reducing manufacturing costs,” Bancel reportedly told employees in a memo that was shared with them on July 31. “Every effort was made to avoid affecting jobs,” he explained. “But today, reshaping our operating structure and aligning our cost structure to the realities of our business are essential to remain focused and financially disciplined, while continuing to invest in our science on the path to 2027.”
The CEO also reiterated that the “decision was not made lightly,” thanking affected employees on behalf of the Executive Committee and the patients who have been aided by their contributions. Moderna’s restructuring layoffs could vastly shift its operations over the coming year, but it does have projects that it hopes will help the company get back on track.
Moderna’s R&D Cuts in 2025 Come Amidst a Shifting Regulatory Landscape
Moderna shares have dropped over 20% this year, and its first-quarter vaccine sales missed Wall Street estimates, according to CNBC. The plan to bring down annual operating expenses by $1.5 billion was announced in September last year, however, it does not appear that the company has been able to make enough headway on the goal and is turning to job cuts as a way to push them a little further along.
Moderna’s call to fame came during the COVID-19 pandemic when it became one of the first businesses to offer vaccines to the masses. However, the demand for the vaccine has since fallen, making it harder to keep matching its profit numbers. The Food and Drug Administration has also enforced changes in its regulatory guidelines for vaccine approvals, and the administration has further cautioned the general public about relying on the RNA shot. Existing contracts with the HHS have been terminated as well.
The company is still working on bringing its experimental COVID-flu combination vaccine to the masses, but it is unlikely to receive approval within this fiscal year. Moderna is also working on developing a ground-breaking cancer vaccine with Merck & Co.—another company that announced layoffs just this week—however, it will be a while before their products can be converted into revenue.
As Moderna cuts costs and 10% of its staff, the industry continues to ponder when it will find stability once more. The Moderna layoffs aren’t occurring in isolation, as businesses across the board are re-evaluating their costs and numbers and choosing to let go of workers to keep the company afloat. The uncertain regulatory landscape and declining investments in scientific research could have a big role to play in the matter, however, businesses will have to evaluate their organization on an individual level to evaluate where they stand and how it will affect their employees.
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