From Bad to Worse: 3 Ways Biopharmas Make Layoffs More Painful for Employees

Layoffs can be a grueling experience for employees, one made even worse when employers stumble during the process, sometimes making mistakes that go viral. In biopharma, opportunities for errors abound. Nearly a quarter (21%) of respondents to a recent BioSpace workforce planning survey said they anticipate making layoffs in 2025. Last year, staff cuts affected about 24,000 pharma and biotech professionals, according to BioSpace tallies.

While companies can make any number of missteps during workforce reductions, three stood out for biopharma professionals who spoke to BioSpace on the condition of anonymity: not being transparent about financial issues leading up to layoffs, not providing severance and not helping terminated employees find their next positions.

When employers don’t tell employees they’re experiencing financial issues, staff cuts can catch people by surprise. That was the situation for a business development/alliance management professional laid off in summer 2024 from a small biotech. She told BioSpace that shortly after receiving an “exceeding expectations” performance review and a bonus, and after returning from the BIO International Convention, her company laid off multiple employees, including her. She didn’t understand why the employer had her represent it in front of potential business partners just days before letting her go.

“Somebody in the management team knew this was going to be happening,” the business development/alliance management professional said.

She noted there seemed to be a “shroud of secrecy” about what was happening at the business.

“When you’re open and transparent about everything else, or claim to be open and transparent about everything else, why not this?” she said. “Why does it have to come as a surprise?”

A lack of transparency can affect not only those being let go but also the employees still at the company, noted an HR professional who was among staff cuts at a midsized biopharma in late 2024.

“Reductions in force and layoffs will happen, and have obviously occurred in the past, but how employers treat employees during these moments impacts the remaining employees’ experience, engagement and productivity,” he told BioSpace via email.

One of the most difficult aspects of getting laid off is losing a regular source of income and health insurance. A biopharma sales representative shared two very different experiences with severance at two companies that let her go.

During her late 2024 layoff from a contract sales organization, she told BioSpace, the CSO gave two months’ notice that her contract would end earlier than expected. She did not receive severance or financial assistance for COBRA, which allows people to keep employer-sponsored health insurance after workforce reductions, although at a high cost. During an earlier layoff at a different company, that employer provided six weeks of severance pay and covered a significant portion of the COBRA fee. This allowed the biopharma sales rep to continue her health insurance for three months at a reduced rate.

She’d like to see biopharmas adopt a similar approach.

“I would appreciate if companies would make it a policy to give severance pay for at least four to six weeks so our entire world is not upended without some peace of mind,” she said, adding she’d also like employers to help keep COBRA costs down and make at least one mental health benefit available at no charge.

“It is as difficult emotionally to deal with job loss as it is to deal with the financial situation,” she explained.

Since losing her job, the biopharma sales rep said she’s had trouble falling asleep because she’s worried about so many things, including the job market, how long she’ll be unemployed and interruptions in her 401(k).

“I like being productive. I like being useful. I like being valued. I like doing a job. I like to work,” she said. “It’s a lot. And that’s where it affects your psyche. It’s that feeling of being devalued and all the uncertainty, particularly for a woman who’s alone and single, with no other support system.”

While employers can help people being let go find future employment through outplacement services or other resources, not all do. A life sciences professional laid off in late 2023 from a large pharma shared she would have liked more support in this area. She told BioSpace that while she appreciated her former employer providing outplacement services through an outside firm, HR itself was not helpful. She said she’s seen other organizations’ HR functions support laid-off employees with finding jobs by providing resume books or networking support.

The life sciences professional was also disappointed there wasn’t an opportunity to stay on in another role at her former employer, whose layoffs followed its acquisition of another business. She noted she’d been at the pharma for six years, and her manager had told her prior to the layoffs that she was in line for a promotion.

“I wish some effort had been made to retain me in some capacity,” she said. “But I also have faith that things work out as they should, and I’m super happy to be where I am and have no regrets.”

She shared that since she was let go, she’s pivoted her career in a way that allowed her to remain connected to the life sciences industry. She also tries to support other people going through layoffs, in part by directing them toward resources that can help with their job searches. Two she recommended are Photofeeler, a website that evaluates what someone’s photos say about them, and Get Landed, a website whose offerings include ATS-friendly resume templates available for purchase.

When it comes to helping employees find their next opportunities, the HR professional noted that smaller biopharmas seem to provide better support, such as by creating resume books for scientists and researchers to help them transition to other research startups.

“Smaller start-ups do seem to help the transition of their scientific staff more than the larger Pharma companies, where informal networks form and colleagues reach out to each other because they know the technical skill sets a former colleague may possess,” he told BioSpace via email.

While companies can make multiple mistakes when laying people off, the HR professional noted the issue isn’t the mistakes themselves but whether employers do enough before eliminating staff. 

“It seems Big Tech and Big Pharma have defaulted to high-volume scale-up hiring, then job cutting and layoffs to pivot due to change in direction (technology, science, lack of commercialization ability),” he shared via email.

He recommended that rather than use job cuts as a message to shareholders that a company is taking action to course correct, Big Pharma should make better business decisions.

“My thought would be for companies to do more in advance of layoffs using strategic and employee-centric decisions to achieve profitability,” he wrote.

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