Amgen announced a major restructuring plan on Friday with the aim of weathering the impacts of falling drug prices and rising inflation. As part of the plan, the company will be letting go of 450 employees.
In January, Amgen took the difficult measure of cutting 300 of its global workforce, representing less than 2% of its total. Now, the company has announced a second round of layoffs this year as it works to stay ahead of the industry’s challenges. A company spokesperson told BioSpace that the job cuts were necessary “to better manage against industry headwinds.”
January saw a wave of job cuts, mostly affecting the company’s US-based commercial operations. The company spokesperson confirmed that the majority of those affected were employees in the US.
In the face of increasing drug costs and rising inflation, a company spokesperson announced the latest round of expense cuts, stating that it is essential to “deliver value for our patients, staff and shareholders.” The changes come as a part of a realignment of the company’s expense base in order to remain competitive.
Amgen, a biotechnology pioneer with a presence in 50 countries, proudly reported in its 2022 year-end SEC report that it employs over 25,200 individuals worldwide. Boasting “relatively low global turnover rates” compared to the industry standard, the organization further augments its workforce with temporary and contingent employees and temporary contractors where needed.
Amgen’s consecutive layoffs this year came as the company’s revenue performance in 2022 remained stagnant. In the fourth quarter of the year, the total revenue clocked in at $6.839 billion, a mere 0.1% dip from the year before. With the entire year’s revenue only 1% higher than 2021, it became evident that the company needed to take drastic measures to reignite growth.
For 2023, Amgen is expecting a revenue boost, with a projected total revenue between $26 billion and $27.2 billion. This is a significant increase from previous years and is a clear indication of the company’s continued success and growth.
Biopharma Layoffs Continue
As another major player in the biopharma industry, Amgen has joined the chorus of companies facing economic uncertainty and reducing costs through layoffs. The global economic climate has proven to be a challenge for many businesses, and Amgen is no exception.
Life science firms have been facing a difficult year, with BDO’s recent report indicating that 13% of these businesses may have to downsize. According to BioSpace’s 2023 Layoff Tracker, this has been reflected in an alarming 40 reports of job cuts since the start of the year—with Amgen just one of the companies affected.
Vaxart has recently taken a drastic step, letting go of 27% of its workforce, in order to realign its pipeline and refocus its efforts on the development of an oral norovirus vaccine. Meanwhile, Neoleukin has made an equally drastic move – slashing 70% of its staff in a strategic review of its business. Both companies are making bold decisions to ensure their future success.
February proved to be a difficult month for Theravance, with the company forced to downsize as a result of ending research activities for its JAK inhibitor program in lung inflammation. A staggering 17% of its workforce was impacted, showing the far-reaching implications of the decision.
Eisai and Merck’s EMD Serono have both announced job cuts to their workforce – 91 employees from Eisai will be let go on Apr. 30, while EMD Serono plan to lay off 133 members of staff in January. Both companies are facing difficult decisions in order to ensure their long-term success.