Global vaccine giants have begun large-scale workforce reductions. U.S. Moderna announced it will cut approximately 10% of its workforce, while Merck (MSD) announced an 8% reduction. This is in response to a decline in sales from vaccines that played a significant role in the company's growth, leading to a need for expense reduction.
Stefan Bancel, Moderna's Chief Executive Officer (CEO), noted on the 31st (local time) that "the number of employees, which stood at about 5,800 by the end of 2024, is expected to fall below 5,000 by the end of this year."
Moderna grew rapidly with its COVID-19 vaccine, but is now experiencing poor performance as the pandemic wanes. The company's sales for the first quarter of this year were $100 million (approximately 140.4 billion won), resulting in a net loss of $1 billion.
Sales of the COVID-19 vaccine have plummeted, and the respiratory syncytial virus (RSV) vaccine is also struggling. Although a next-generation COVID-19 vaccine has been developed and received conditional approval from the U.S. Food and Drug Administration (FDA), there are many restrictions regarding the target age and conditions.
Earlier, Moderna announced plans to reduce its research and development (R&D) budget by $1.1 billion (1.54 trillion won) by 2027 and significantly cut overall operating expenses. Bancel said that on this day, "we prioritized R&D and operational expense reductions to maintain employment, but now is the time to readjust our cost structure to align with business realities."
MSD stated that it plans to reduce approximately 6,000 employees, which is about 8% of its total workforce. This news comes just two days after the company announced plans to save $3 billion (approximately 4.2 trillion won) in expenses by 2027.
MSD has also been hindered by vaccine sales. Sales for the human papillomavirus (HPV) vaccine "Gardasil" in the second quarter were $1.1 billion (approximately 1.5 trillion won), more than halved compared to the same period last year ($2.48 billion). There are no additional shipping plans due to decreased demand from China.
The company's blockbuster cancer drug "Keytruda" is approaching patent expiration. In the second quarter of this year, Keytruda sales reached $8 billion (approximately 11.22 trillion won), accounting for more than half of the company's total sales of $15.8 billion (approximately 22.17 trillion won). MSD expects competition from generic versions of Keytruda to intensify in the U.S. market starting in 2028.
Industry analysts have noted that internal factors, such as patent expirations and declining sales of key drugs, combined with external factors like tariff imposition on pharmaceuticals in the U.S., the world's largest pharmaceutical market, are causing global pharmaceutical companies to tighten their belts.
Other global pharmaceutical companies are also pushing for large-scale expense reduction plans. In 2023, German Bayer announced a plan to save 2 billion euros by 2026, intending to cut more than 4,000 employees this year after reducing 7,000 last year.
U.S. Bristol-Myers Squibb (BMS) is also implementing a 'strategic productivity enhancement program' aiming to reduce expenses by $2 billion by 2027. Pfizer has also expanded its restructuring efforts with a target of cutting $7.7 billion by 2027.