Over 2,000 Layoffs in 19 Global Pharma Companies, Johnson & Johnson and Merck Restructure Operations in China

According to the latest monitoring data, at least 19 pharmaceutical companies globally announced layoffs or business streamlining plans in November. The impact on multinational pharmaceutical companies operating in China has been particularly significant, with Johnson & Johnson and Merck implementing layoffs in the country.

Johnson & Johnson's layoffs in China reached 2,000 people, approximately 20% of its total workforce, mainly affecting the surgical division. The layoffs were primarily due to declining company performance, especially in its ultrasound knife business, which saw its market share plunge from 95% to less than 30%. Since the second quarter of this year, Johnson & Johnson has also undergone business adjustments, with several senior executives, including the president of China, Song Weiqun, leaving the company.

Merck also conducted staff reductions in its China division, although the exact number of layoffs has not been specified, primarily affecting the diabetes department. Due to the impact of centralized procurement policies, Merck's diabetes drug business has suffered significantly, forcing the company to take measures to drastically reduce costs.

In recent years, centralized procurement policies have driven down drug prices, leading to significant profit reductions for pharmaceutical companies, which have had to scale back or sell their operations in China in response. For example, Pfizer sold its PCV13 vaccine business and conducted extensive layoffs.

In this context, other pharmaceutical companies have also announced restructuring plans. Sana Biotechnology is shifting its research focus from cancer to autoimmune diseases and has undergone strategic restructuring, though it has not disclosed the number of layoffs. Viracta Therapeutics, focusing on precision oncology, announced approximately 42% layoffs to concentrate resources on its Nana-val development project. Aurinia laid off 45% of its workforce due to an inability to find a buyer, aiming to maintain cash flow. A gene sequencing company announced a 40% reduction in staff and the termination of all therapeutic projects due to declining business and cash flow issues. Marinus Pharmaceuticals announced a 45% reduction in staff following the failure of its core drug in Phase III clinical trials. Adaptimmune stated it would lay off 33% of its workforce in Q1 2025, aiming to save $300 million over the next four years and achieve break-even by 2027.

Additionally, companies such as Gilead, Sensei Biotherapeutics, Sonata, Lexicon Pharmaceuticals, Bristol-Myers Squibb, Alector, Medigene, Novartis, and Kronos Bio have also announced layoffs or restructuring plans to respond to the current challenges in the pharmaceutical industry. These measures reflect the strategies adopted by the pharmaceutical industry in the face of market changes and policy adjustments.