Layoffs now seem to be a big trend in the United States (US), when they were first implemented by automotive giants such as Ford and Honda, signaling that a wave of workforce reductions is hitting various sectors of the country's industry.
Now, this 'layoff virus' has also infected the pharmaceutical sector when Moderna Inc, a Massachusetts-based biotechnology company, announced that it will reduce about 10% of its workforce worldwide by the end of this year.
The reduction will see the number of employees drop to below 5,000, part of a cost-saving plan worth $1.5 billion targeted by 2027.
According to its CEO, Stephane Bancel, the move was made after the company completed several clinical trials and successfully lowered production costs and renegotiated agreements with suppliers. Moderna previously expected its operating expenses to be in the range of $4.7 billion to $5 billion.
The company is now pinning its hopes on new mRNA-based products such as a COVID-flu combination vaccine, in an effort to offset the decline in COVID-19 vaccine sales and the lukewarm reception to the RSV vaccine.
However, uncertainty surrounding new vaccine approvals and changes in vaccine policy under US Health Secretary Robert F. Kennedy Jr., who is known for his anti-vaccine stance, continue to weigh on investor sentiment. Moderna shares are reportedly down more than 20% this year, and have lost more than 90% of their value since the peak of the pandemic.
Despite the pressure, Bancel remains confident in the company’s direction and is targeting eight more new product approvals over the next three years.
