2024 Global Pharmaceutical Layoffs and Severance Costs: Strategic Restructuring Amid Industry Transformation

In 2024, global pharmaceutical companies are facing numerous challenges and transformations, with layoffs becoming a common phenomenon in the industry. Layoff news has emerged from international pharmaceutical giants to emerging pharmaceutical companies in China, reflecting not only the strategic adjustments of these companies but also the transformation difficulties of the entire pharmaceutical industry under the pressures of market, R&D, policies, and more.

The editor has compiled a list of layoffs and compensation situations for some pharmaceutical companies.

Foreign pharmaceutical companies

Pfizer

On January 4, Pfizer announced that its vaccine research and development base located in Pearl River, New York, will lay off 285 employees.

On January 29, Pfizer planned to lay off 52 people at its factory south of San Francisco;

In February, Pfizer laid off 791 people in Gladstone, New Jersey;

Pfizer Layoffs 210 Employees in North Carolina;

Pfizer to Cut Up to 210 Manufacturing Jobs at Plants in Grange Castle, Newbridge, and Ringaskiddy, Ireland.

On November 26, 2024, Pfizer sold the sales rights of four oncology products to China Resources. Regarding employee retention,Pfizer offered two options: 1. Choose to leave with compensation, the compensation plan is N+1+2, with the departure date set for February 28, 2025. The actual compensation plan is N+5; 2. Choose to transfer to CRRC, where compensation can still be obtained, and the salary at CRRC remains unchanged. The last working day at Pfizer will be December 31. For pregnant colleagues, the compensation plan is N+1+2+17, which equals N+20.

Johnson & Johnson

New Jersey Headquarters Layoffs: According to the WARN update in New Jersey, USA, Johnson & Johnson plans to cut 231 jobs in New Brunswick, New Jersey, with an effective date of December 27, 2024.

China Region Surgical Department Layoffs: Johnson & Johnson China reportedly initiated large-scale layoffs in November, involving up to 2,000 employees, accounting for approximately 20%. The surgical department was the most heavily affected.

Compensation Plan for the Surgical Department in China:Employees with less than 3 years of service will receive N+1 compensation, those with 3 to 6 years will receive N+2, and those with more than 6 years will receive N+3. N represents the employee's average monthly salary from November 2023 to October 2024. One employee revealed that after working for 7 years, they received 400,000 yuan in compensation, and a number of employees received compensation between 500,000 and 700,000 yuan.

Roche

The number of layoffs in the product development department is expected to be 345 people;

Genentech, a Roche subsidiary, to cut 3% of its workforce, over 400 employees;

Lung Cancer Product Line Announces Minor Layoffs.

Reportedly, the compensation plan for the small-scale layoff of Roche's lung cancer product is N+3.

Novo Nordisk

Novo Nordisk Plans to Cut 400 Jobs in China and Denmark, Including 30 in China;

According to Novo Nordisk's financial report, the company has decided to restructure its operations, and the number of global employees will be reduced by approximately 8% to 10%. Based on its global workforce of 15,000 employees, this round of layoffs will affect 1,200 to 1,500 people.

It is reported that the severance package for layoffs in China is N+3+1, with the 13th month's salary for this year paid in full. The departure date is December 31, and employees who sign immediately will receive an additional bonus of 10,000 yuan.

Eli Lilly

Lilly's Main Focus in 2024 is on Integrating and Cutting Jobs in the Domestic Insulin Product Business Unit and Diabetes Treatment Alliance; Specific Layoff Numbers Remain Unclear, but Reports Indicate Many Pharmaceutical Representatives Have Been Laid Off.

The severance package is N+3, where N represents the average income, and the departure date is December 31. In addition to the standard N+3 compensation, employees can also take away benefits such as the fourth-quarter bonus, savings, and stock options upon leaving. Reports suggest that many pharmaceutical representatives received compensation ranging from 400,000 to 500,000 yuan.

Novartis

Novartis Plans to Restructure Global R&D Team, Considering 1%-2% Reduction in Staff Within 2-3 Years, Cutting Approximately 440 Positions in Switzerland and Up to 240 Jobs in the U.S.;

Novartis cuts nearly 140 jobs at New Jersey plant;

Novartis Plans Global Layoffs of Approximately 8,000 Employees, Accounting for About 7% of the Company's Workforce, Including Up to 1,400 Positions in Switzerland;

According to reports, Novartis' compensation plan is N+3, where N refers to the employee's average monthly salary.

AstraZeneca

In early November, it was reported that AstraZeneca's layoffs involved multiple product lines, affecting more than 150 people.

AstraZeneca's severance package is N+3, with the last departure date set for December 31.

Bayer

Bayer cut more than 1,500 jobs in the first quarter of 2024, with about two-thirds of them being management positions;

Bayer also plans to cut nearly 1,500 jobs in the U.S. and Austria in early 2024 and 2025.

Reports suggest that Bayer's compensation plan for its China region is N+1, with employees in their probation period receiving half a month's base salary as compensation.

Bristol-Myers Squibb (BMS)）

In March, BMS had laid off 75 people in Lawrenceville;

In June, BMS laid off approximately 863 employees in Lawrenceville, New Jersey;

On November 26, BMS announced plans to lay off approximately 195 more employees from its Lawrenceville, New Jersey plant.

BMS Announced Strategic Productivity Plan in April 2024, Expected to Lay Off 2,200 Employees, Accounting for 6% of Total Workforce.

Takeda Pharmaceutical

In May, Takeda Pharmaceutical announced a multi-year restructuring plan. Starting in July, the company began layoffs of 495 employees at its Cambridge plant and 146 employees at its Lexington plant in Massachusetts, USA, totaling 641 employees.

In August, Takeda Pharmaceutical announced plans to close its R&D center in California, USA, and lay off 1,000 employees in the country.

CureVac

Once one of the mRNA giants, plans to cut about 30% of its workforce, approximately 351 employees.

Domestic pharmaceutical enterprises

CSPC Group

According to online reports, multiple departments including R&D, sales, and medical affairs are undergoing job competition. The results for the competition in the oncology drug sales division have already been announced. Employees who failed the competition will be on standby, and as of now, the number of employees on standby has exceeded 100.

CSPC Pharmaceutical Group compensates employees who failed in the competition for a position by giving them 2 months to find a new job and paying them 2 months' salary.

Beta Pharma

In March this year, a large-scale layoff was carried out, with hundreds of people laid off and the layoff rate in the R&D department being around 60%.

The compensation standard is N+1.

Innovent Biologics

According to public reports, Innovent Biologics eliminated its entire research team at its U.S. headquarters in Rockville, Maryland, and closed the facility at the end of February 2024, but did not specify the exact number of layoffs.

Junshi Biosciences

According to public reports, Junshi Biosciences adjusted its sales team in November 2024, with layoffs amounting to approximately 8%. The affected employees were mainly from marketing positions, and support functions were also impacted to a certain extent.

Rongchang Bio

According to public reports, the number of R&D personnel at Rongchang Bio in the first half of 2024 decreased from 1,308 in 2023 to 1,216, a reduction of 92 people, with a layoff rate of approximately 7%.

Akeso Biopharma

In October, about 15% of the workforce was laid off, primarily from the antibody drug development team, including support staff involved in early clinical trials.

Tensun BioPharma

The significant reduction in personnel can be seen from the data, such as a 22 million decrease in administrative staff costs and a 36 million decrease in R&D staff costs.

Connect Biopharma

As part of the transition to a U.S.-centered company, there are plans to significantly scale down operations in China. Over the past year, the number of employees in China has been reduced by approximately 15%, with further layoffs expected by the end of the year.

A Part

Information undisclosed, layoffs are actually happening. Compensation standards: transfer, pay cut, or "voluntary" resignation for not aligning with company values, at nearly zero cost.

Summary

In Response to the 2024 Pharmaceutical Industry Layoff Wave: Strategic Considerations

Despite the widespread layoffs in pharmaceutical companies in 2024, the pharmaceuticals industry, as a crucial sector related to human health and well-being, still boasts broad development prospects. With the intensification of global aging, the continuous evolution of disease patterns, and the growing awareness of health, the demand for pharmaceuticals will keep rising. Advances in technology, such as the deep application of gene-editing techniques and artificial intelligence in drug research and development, are expected to significantly accelerate the new drug development process, enhancing the precision and effectiveness of treatments. In the future, pharmaceutical enterprises need to accurately perceive market changes and industry trends, continuously strengthen innovation capabilities, optimize resource allocation, and achieve sustainable development through reasonable strategic adjustments and scientific talent management, contributing more to the global health cause.