Novartis to Cut Over 600 Jobs Across Switzerland and the U.S. Amid Ongoing Pharma Restructuring

　　【Pharmaceutical Network Industry Dynamics] With the changes in policy and market environment, layoffs by multinational pharmaceutical companies have become a trend. Since 2024, a wave of layoffs has continued to hit the pharmaceutical industry, with news of job cuts coming from Novartis, Sanofi, Boehringer Ingelheim, Pfizer, Bristol-Myers Squibb, GlaxoSmithKline, and others.
 

According to foreign media reports, Novartis revealed this week that it plans to reorganize its global development department over the next two to three years. A company spokesperson disclosed in an email that the plan involves both increasing and decreasing positions at certain locations. Specifically, the plan calls for cutting approximately 440 development jobs in Switzerland and up to 240 positions in the United States. As early as 2022, Novartis announced a major global restructuring, including cutting around 8,000 jobs worldwide, aiming to improve efficiency and streamline the company’s overall structure. Novartis hopes to save at least $1 billion by 2024.
 

On April 22, it was reported that BMS will lay off 252 employees from Mirati Therapeutics, a commercial-stage oncology targeted drug development company acquired by BMS, located in California. Previously, a spokesperson for BMS stated in a declaration that, as part of the integration, the company is reallocating resources to better support its operational model and portfolio development. In this process, some employees will inevitably be affected.
 

On April 4, Boehringer Ingelheim announced that it would lay off some sales staff due to the lower-than-expected sales of its Humira (adalimumab) biosimilar Cyltezo in the United States. Although Boehringer Ingelheim has not disclosed the specific number of layoffs, the company stated that it plans to reduce its customer-facing sales team and transition to a hybrid sales model, including face-to-face (F2F) and virtual operations.
 

In March 2024, Sanofi announced it would close a research and development center in the UK that it had acquired through a transaction, resulting in the elimination of 90 jobs.
 

Pfizer has announced at least two rounds of layoffs this year. On January 4, Pfizer announced that it would lay off 285 employees at its vaccine research and development facility in Pearl River, New York; on January 29, Pfizer announced another layoff plan, which involved 52 employees at its R&D center in San Francisco.
 

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According to incomplete industry statistics, nearly 60 pharmaceutical companies announced layoffs or plant closures in the first quarter of 2024 alone. In January, February, and March, 24, 16, and 17 pharmaceutical companies, respectively, announced staff reductions. The total number of layoffs was similar to the same period last year. According to Fierce Biotech, as of April 9, 2024, a total of 63 biotech companies had implemented layoffs.
 

Analysis suggests that the pressure on pharmaceutical companies' performance is often the reason for their frequent "reductions." According to the 2023 financial reports, the revenue of many multinational pharmaceutical companies declined significantly year-on-year. For instance, Pfizer's revenue in 2023 dropped by 41%, reaching only $58.496 billion; AbbVie and Bayer, although both with revenues exceeding 50 billion yuan, saw their revenues decrease by 6.4% and 6.1% respectively.
 

Notably, among the multinational pharmaceutical companies planning layoffs, there are also companies that have achieved positive growth in performance. For example, Novartis' 2023 financial report shows that both its revenue and net profit maintained double-digit growth. Specifically, revenue reached $45.44 billion, a year-on-year increase of 10%, while net profit was $8.572 billion, a year-on-year increase of 62%. However, despite the growth in performance, the company’s layoffs have not decreased, and it continues to divest non-core businesses to better focus on innovative drugs and other areas.
 

Disclaimer: Under no circumstances shall the information or opinions expressed in this article constitute investment advice to any person.