Pfizer will reduce its costs by $2.5 billion in another round of cutbacks which will kick in next year and run through 2029. The New York company unveiled the plan in its second-quarter earnings report (PDF).
The savings effort comes amid a quarter in which Pfizer topped expectations with a 3% revenue increase to $15 billion. The company raised its 2026 sales guidance at the midpoint by $500 million to a range of $60.5 billion to $62.5 billion.
The additional cutbacks bring Pfizer’s total cost-savings target (PDF) to $9.7 billion through 2029. Of the new $2.5 billion effort, $1.5 billion is earmarked for optimizing the company’s manufacturing operations with the remaining $1 billion added to Pfizer’s “cost realignment program.”
In total, the cost realignment plan is designed to save the company $6.7 billion through the end of 2029. Pfizer is churning $500 million of the cost savings into R&D investment this year, it added.
The manufacturing optimization effort is “focused on network structure changes, product portfolio enhancements and additional operational efficiencies,” Pfizer said.
Overall, the cost savings will support “margin expansion through productivity gains” and provide “future growth opportunities,” Pfizer added.
To install and execute the new cost savings, Pfizer will incur a one-time expenditure of $6 billion, with much of the figure going to severance, implementation and exit costs, in addition to non-cash expenditures for accelerated depreciation and asset write-downs.
The program is a continuation of Pfizer’s reorganization which kicked off in 2023, following its $43 billion acquisition of antibody-drug conjugate specialist Seagen. The buyout expanded Pfizer’s headcount to 88,000 at the end of that year and has since been in decline, falling to 75,000 at the end of 2025.
As for Pfizer’s quarterly revenue surprise, analysts had expected a year-over-year decline given the company’s 10% sales boom in the second quarter of 2025, which was attributed to contractual arrangements for COVID products, Comirnaty and Paxlovid.
While the COVID products saw major dropoffs, including Paxlovid sales plummeting from $427 million in the second quarter of last year to $21 million the same period this year, Pfizer’s growth products thrived, including blood thinner Eliquis, which was up 21%, and migraine therapy Nurtec, which saw an 18% increase.
Pfizer’s cancer medications that were up included Orgovyx (+51%), Lorbrena (+41%) and Padcev (+23%), helping the oncology portfolio to a 9% bump.
Even in the face of new competition from Alnylam and BridgeBio in ATTR-CM, Pfizer’s Vyndaqel family of drugs realized a 9% gain.
Another positive was the rebound of RSV shot Abrysvo, which was up 46%.
Interim chief financial officer Cecile Guegan said that Pfizer’s upgraded revenue guidance “reflects strong non-COVID product performance.” The uptick includes a $1.5 billion increase in expected sales from non-COVID products, along with a $1 billion reduction in the company’s projection of its COVID product sales, from $5 billion to $4 billion.
“The performance that we have to date reflects the low infection level, mostly impacting Paxlovid,” Guegan added on a conference call Tuesday. “But we remain with our revenues for Comirnaty in the later part of the year, consistent with the vaccination season.”