The largest biopharma layoffs of 2014

The pharma industry has taken like none other to the notion of controlling costs by laying off employees. And so every year there will be some substantial number of displacements. But how substantial will depend on lots of factors in any given year.

The layoff roller-coaster ride also has lots of ups and downs. And so while the top 10 announced layoffs in 2011-2013 averaged nearly 30,000 a year, there were far fewer in 2014. In fact, so few that this year we tallied only 10,691 among 7 companies.

Drugmakers tie layoffs to one financial factor or another, a pending patent cliff loss, perhaps, or a failed program. The approach in the past year has been decidedly different and one that will play out over several years before the net employee numbers are evident. That is because last year drugmakers were focused on, well, getting focused, spurring M&A action like the industry hasn't seen in many years. Drugmakers were picking up companies to add heft or specialty companies to get their hands on promising drugs.

Actavis ($ACT) comes to mind with its $25 billion buyout of Forest Laboratories, followed by its $66 billion deal for Allergan. And of course, Novartis' ($NVS) dealmaking gymnastics included buying the oncology assets of GlaxoSmithKline ($GSK) and selling most of its vaccines business to GSK. Then, it formed a joint venture with the British drugmaker for the pair's consumer health ops, with GSK running--and getting most of the benefit from--that deal. It then unloaded its animal health business to Eli Lilly ($LLY) and the rest of its vaccines business to CSL.

With these deals, the buying company adds headcount, but it often cuts jobs to eliminate overlap and help pay for a deal, and any company selling a unit sheds employees, along with some revenue. The point is, while drugmakers seemed more concerned last year with doing deals than axing jobs, the net head count at many companies in the industry will still end up much different in the next couple of years. We just won't know how different until the deals close and cuts are made.

That said, after several years in which so many longtime pharma employees found themselves out of work, it is nice to report that things settled down more recently, allowing employees and execs to focus on research and revenue instead of remaking resumes. As always, please let us know through any of the usual channels if you have thoughts on the report.

-- Eric Palmer (email | Twitter)

Read More:
The largest biopharma layoffs of 2014