Pharmaceutical giant Merck & Co to lay off 6000 employees, while Moderna plans to reduce workforce by approximately 500.
In a significant move, Merck & Co, the multinational pharmaceutical giant, has unveiled a multiyear restructuring initiative aimed at saving $3 billion annually by the end of 2027. As part of this plan, approximately 6,000 positions will be eliminated globally, encompassing administrative, sales, manufacturing, and research-and-development roles [2][5].
The primary focus of this cost-cutting plan is to shift spending away from older, slower-growth areas of the business towards investment in newly launched drugs and experimental medicines. This strategic move is particularly relevant as Merck faces impending biosimilar competition for its best-selling cancer antibody, Keytruda (pembrolizumab), beginning in 2028 in the U.S. [1][2][5].
The program targets a total of $3 billion in annual cost savings by the end of 2027, with approximately $1.7 billion expected in annual savings realized sooner [4]. These savings will be reinvested into higher-potential areas such as R&D and commercial support for newer drug launches [1][3].
The restructuring includes leveraging technological advancements to boost productivity and streamline operations, optimizing the portfolio by reducing investment in mature, lower-growth business units, and prioritizing growth drivers like newer oncology treatments and vaccines [1][3].
Merck recorded $649 million in restructuring charges in Q2 2025 related to this plan and anticipates cumulative pretax costs of about $3 billion for the program [4]. The company expects full realization of cost savings primarily by end of 2027 [4].
The cuts and efficiency efforts come amid challenges including the upcoming generic competition to Keytruda, faltering sales in markets like China and Japan for Gardasil (its second biggest drug), and general pharma industry adjustments to patent cliffs and shifting market demands [1][5].
Despite the cuts, Merck is investing heavily in expanding manufacturing capacity. For instance, a $1 billion biologics center for Keytruda production in Delaware and an $895 million expansion of its Animal Health vaccine facility in Kansas are just a few examples [4].
This strategic reallocation represents Merck’s commitment to driving growth across new drug pipelines and R&D while streamlining the existing business ahead of significant patent expirations and competitive pressures [1][2][4][5].
In a related development, Teva Pharmaceuticals, another pharmaceutical giant, has begun cutting over 2000 jobs. The pharma industry seems to be undergoing a period of significant transformation as companies strive to maintain profitability amidst changing market dynamics.
- Merck's restructuring initiative, aimed at saving $3 billion annually, will see the reinvestment of those savings into higher-potential areas such as research and development (R&D) and commercial support for newer drug launches, indicating a shift in focus towards science and health-and-wellness.
- In light of the challenges faced by the pharmaceutical industry, including patent cliffs, shifting market demands, and generic competition, Merck is not only implementing cost-cutting measures but also investing heavily in finance, notably by expanding manufacturing capacities for drugs like Keytruda.
