Layoffs have been a common refrain for the pharma industry in recent years as patent losses, consolidations and cost cutting have been front of mind. But with the economy picking up, private equity flowing into the business and a bunch of great drugs coming online, layoffs were down last year and this year should be one in which hiring sucks up some of the displaced folks from years past. At least that is the contention of experts who track these matters closely.
The industry has overcome many of the "head winds" it has been facing and layoffs should again be down and hiring should build momentum, John A. Challenger, CEO of Challenger, Gray & Christmas, told Genetic Engineering and Biotechnology News.
"It does seem like this past year, a large portion of that restructuring that occurred in big pharma had been completed, so that there was less pressure to do that," Challenger said. "Generally, the economy is strong. Biotechs are growing. Healthy sectors like pharma have lots of small companies. They're not just dominated by big old-line companies. So by definition, it's a healthy sector because of all that new growth that keeps on occurring, and all the venture money that has been flowing into healthcare."
The industry last year announced nearly 18,000 layoffs, but that was significantly better than the previous year. According to Challenger's latest job cuts report, 2014 ended with 20% fewer cuts than 2013--17,636 announced jobs cuts compared with 22,161 in 2013.
Still there were some stingers in the year. Among the bigger cuts announced in 2014 came from Amgen ($AMGN), which unveiled two rounds of cuts that added up to 4,000 employees. Those staff cuts include its R&D campus in Seattle and a plan to close a quarter of all its facilities. Merck ($MRK) in July said it was cutting about 600 sales reps.
But some companies have jumped into 2015 soliciting resumes and preparing for growth. At the JP Morgan Healthcare Conference last week, Valeant ($VRX) CEO J. Michael Pearson said Valeant was adding more than two dozen sales reps to its contact lens business and plans to double the sales ranks in dermatology to about 300.
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