Biotechs ‘in better position to avoid workforce reductions’ as layoffs continue to ease in Q2’26

A sharp reduction in biopharma layoffs continued in the second quarter of 2026, extending a trend that started last fall. According to an analysis of Fierce Biotech’s layoff data, a total of 17 biopharma companies were reported to be laying off employees from April through June—barely half of the 33 companies reported across the first three months of this year. The latest figures are a far cry from early in 2025, when 64 and 62 layoff announcements were reported by Fierce in the second and third quarters, respectively. A separate Fierce analysis recently found that over the course of 2025, the 17 pharma companies with at least $20 billion in annual revenue collectively cut more than 22,000 positions. So far, 2026 has offered some respite for biopharma employees. Oren Livne, a partner in global life sciences transactions at law firm Baker McKenzie, speculated that the worst may be over as long as the overall economy remains steady. “With M&A activity increasing and the IPO window starting to open, financing conditions should continue to improve, putting biotechs in a better position to avoid workforce reductions,” Livne told Fierce. “That said, as always in this industry, companies whose assets are not meeting key milestones will continue to face pressure.” When compared to the 64 layoff rounds in the second quarter of last year, the turnaround for the latest quarter is even more stark. The year-ago quarter included May 2025, when layoffs hit a monthly high of 29 announcements. That was more than any other month over the four years that Fierce has been tracking this measure. The second quarter of this year saw genomic medicine biotech Sangamo Therapeutics sell off assets to Eli Lilly and Astellas Pharma while also cutting around 51 roles as part of a bankruptcy process. Acquisitions were more directly implicated in two of the quarter’s layoff rounds courtesy of Gilead’s buyout of Arcellx and Biogen’s purchase of Appellis. Regulatory difficulties explained two other layoff rounds. Replimune revealed across two announcements in April that a total of 124 roles would be scrapped after the FDA rejected its melanoma candidate. Meanwhile, Passage Bio shrank its headcount by 75% after tough feedback for its lead gene therapy, before ultimately opting for a reverse merger with RNA specialist Remix Therapeutics. While the looming threat of AI is putting many industries on edge, we have yet to see these changes cited as a major reason to reduce headcount in biotech. For example, longevity company Insilico has leaned into AI in its drug discovery process, but CEO Alex Zhavoronkov, Ph.D., told Fierce he has been working to make sure this tech doesn’t disrupt too many positions. “We would only adjust the headcount if people do not learn to be significantly more productive with AI,” he said. “If the function becomes redundant—like the front-end developers, for example—I ask the team to repurpose them and improve their productivity.” “If they cannot learn and improve productivity within a certain period, we definitely need to adjust,” Zhavoronkov added. Brad Stewart, national life sciences leader at business advisory firm BDO, told Fierce that AI may still drive layoffs at large publicly traded companies, but the impact will likely be limited. “As the industry becomes increasingly aware that AI-driven efficiencies do not cause substantial short-term improvements in life sciences, I believe AI-related layoffs will slow in Q4,” he said. While the trendline for layoffs this year looks positive, Ron Cohen, M.D., former chair of BIO and current CEO of Oryon Cell Therapies, pointed to a couple of high-profile layoff rounds, namely BioNTech and Takeda, as reasons not to get carried away. In May, Takeda announced plans to cut 4,500 positions as part of an ongoing restructuring drive first set out in March, while BioNTech is planning to lay off 1,860 employees in its manufacturing operations. “M&A activity has picked up substantially since last year, which actually may tend to increase layoffs, as some or most of the associates in the acquired company may be considered redundant by the acquirer,” Cohen told Fierce. And while last quarter saw record-breaking IPOs from the likes of Parabilis Medicines and the resilience of megarounds like NewLimit's $435 million series C, Cohen suggested that this flood of cash could have unintended consequences downstream. “While there have been more ‘mega’ VC rounds, it doesn’t seem that early-stage company VC rounds have increased substantially yet, which means that early-stage companies remain under pressure to cut costs, and therefore employees,” he said. This sentiment was echoed by BDO's Stewart who suggested that while companies nearing product launch should see hiring increases, preclinical and early-stage companies continue to struggle to find funding and maintain their headcounts.