What are the reasons for the downsizing in the pharma sector, and how can we cope with it?
The pharmaceutical and biotech sectors have faced a challenging landscape marked by significant layoffs in recent months. In today's article, I randomly selected three companies operating in Basel: Novartis, Roche, and Bayer.
Those three companies and many more have announced substantial workforce reductions, signalling a shift in industry dynamics and strategic priorities.
Novartis: Streamlining for Innovation
Novartis recently announced plans to cut approximately 800 jobs in development. This decision is part of a broader restructuring effort to simplify its organizational structure and increase operational efficiency.
The CEO, Vas Narasimhan, emphasized that these changes are crucial for fostering innovation and focusing on high-growth areas such as gene therapies and oncology. By streamlining operations, Novartis aims to redirect resources towards research and development, ensuring long-term competitiveness in a rapidly evolving market.
Roche: Adapting to Market Realities
According to Fierce Biotech, Roche plans to lay off a few hundred people on its product development team.
According to a company spokesperson, Roche attributed the layoffs to a standard business review “to ensure ongoing improvement and sustained readiness.”
Roche says it expects “the majority of the proposed headcount reduction to impact external contractors,” with less than 6% of the permanent product development team potentially impacted.
While the number of at-risk full-time employees was not disclosed, Roche said it would be less than 340.
Bayer: Trimming the red tape
According to Fortune , Bayer is worth a quarter of its $122 billion peak from nine years ago. Its shares have tanked by more than 50% in the last year, and it’s been fighting thousands of weed-killer cancer claims since its so-far-disastrous acquisition of Monsanto in 2018.
When announcing the cuts, CEO Anderson did not specify precisely how many of the organization’s 17,000 managers will be laid off or demoted in Bayer’s quest to trim red tape.
Still, a Bayer executive has suggested that those impacted will be in the thousands, not hundreds.
The Broader Context: Why Are Layoffs Happening?
The recent wave of layoffs in the pharma and biotech sectors is not isolated. Several factors are contributing to these workforce reductions:
1. Patent Expirations: Many pharmaceutical companies are facing the expiration of patents for their blockbuster drugs, leading to a significant revenue loss as generic competitors enter the market. This has forced companies to reallocate resources and cut costs to stay competitive.
2. R&D Challenges: Developing new drugs is a costly and time-consuming process with no guarantee of success. Companies are under immense pressure to produce innovative treatments that can deliver high returns on investment. Streamlining operations and focusing on high-potential areas can help mitigate financial risks.
3. Market Competition: The biotech and pharmaceutical industries are highly competitive, with numerous players fighting for market share. Companies must constantly adapt to new market dynamics, including shifts in regulatory landscapes, pricing pressures, and changes in healthcare policies.
4. Technological Advancements: Technological advances like automation and artificial intelligence are transforming how companies operate. While these technologies can drive efficiency and innovation, they necessitate workforce restructuring to align with new operational models.
Moving Forward: Best strategies for affected employees
While layoffs are undoubtedly challenging for those affected, these changes often open up new avenues for career development in emerging areas of the industry.
We first tell the impacted people: "There is nothing wrong with you." It's the job market.
Let us look into three areas of development.
1. Continuous Learning and Skill Development:
Staying relevant and up-to-date with the latest trends and technologies is crucial. Investing in continuous learning and skill development can enhance your marketability and make you more attractive to employers.
Some clients invest in AI skills, learn Python for data analysis, or get project management certifications.
2. Networking and Building Relationships:
Networking is critical in the pharmaceutical industry.
The more competition in the job market, the more vital networking is. In my recent LinkedIn live with Nathan A. Perez, we discussed this topic in depth.
Building and maintaining strong professional relationships can open up new opportunities and help you stay informed about job openings and industry trends.
3. Flexibility and Adaptability:
Being flexible and adaptable to change is essential in navigating the ups and downs of the job market.
Explore different roles, and be open to opportunities that may not align with your initial career plans.
Think about the transferable skills you possess, which could enable you to find a new position.
