The trend of fewer companies letting employees go, which began in the fourth quarter of last year, has continued. However, more employees were on the chopping block in Q1 2026 than in Q1 2025, due mainly to one company’s cuts.
For the second straight quarter, the number of biopharma companies laying off or projecting they’ll lay off employees slowed year over year, according to BioSpace tallies.* In Q1 2026, 35 companies made or planned cuts. In the first quarter of 2025, 74 did so. During Q4 of last year, the number of biopharmas laying off or projecting they’d lay off employees was 37, down from 47 in Q4 2024.
While cuts slowed year over year during each month in the first quarter of 2026, the biggest dip happened in January. The number of companies making or planning cuts that month dropped from 27 to 11.
The decrease in made or projected layoffs from Q1 2025 to Q1 2026 didn’t surprise Ira Leiderman, healthcare managing director at investment banking firm Cassel Salpeter & Co., which primarily handles mergers and acquisitions. He told BioSpace that in the first quarter of last year, some companies may have overreacted when making cuts in response to the uncertainty the industry has faced in areas such as funding, which affects the biopharma workforce.
“You have funds, you hire people, or you at least maintain your head count as you have it,” Leiderman said.
In 2026, however, a slight shift has occurred in biopharmas’ reactions to uncertainty, according to Leiderman.
“I think last year, people were scared,” he said. “This year, people are worried.”
There’s been some positive news in 2026 when it comes to funding. During the first quarter, seven biopharmas went public, almost matching 2025’s total of eight.
Employee count rises with Viatris cuts
While the number of companies making or projecting layoffs dropped year over year in the first quarter, total affected employees rose from 5,926 to 6,593. A large chunk of that increase is due to Viatris planning to cut up to 10% of its global workforce within the next three years. The layoffs could affect about 3,000 staffers given the company has more than 30,000 employees, according to an SEC filing.
No other biopharma’s Q1 cuts topped 1,000, but Evotec’s strategic reorganization could come closest. The company will let go of as many as 800 employees as it works to downsize its global footprint from 14 to 10 sites worldwide in the next two years.
While not all the 6,593 biopharma professionals affected by Q1’s layoffs immediately flooded the job market, many are likely actively looking for—or at least thinking about exploring—new positions. However, Leiderman noted, they may find fewer employment opportunities, especially in research, because companies aren’t doing a huge amount of hiring.
That said, hiring activity gained momentum as the first quarter wrapped up, according to BioSpace data. While jobs postings live on the BioSpace website during Q1 remained nearly flat year over year, at +0.8%, they went up 5% in February and 7% in March.
Layoffs hit California, Massachusetts hardest
As to where the first quarter’s layoffs took place, based on companies whose cuts or projected cuts were identified as affecting specific locations, workforce reductions hit employees in 11 states.
Massachusetts had the most biotechs and pharmas (11) letting or projecting they would let go of staffers, followed by California (eight).
Biopharma wasn’t the only industry whose layoffs heavily affected people in California and Massachusetts during the first quarter. Those states had some of the highest unemployment rates in January 2026, according to the U.S. Bureau of Labor Statistics. While the national unemployment that month rate was 4.3%, California landed at 5.4%, the same number it hit a year prior, while Massachusetts came in at 4.7%, up 0.5% from January 2025.
Regarding which biopharma companies’ first-quarter layoffs will have the greatest reach across the U.S., Takeda’s will affect the most states: California, Massachusetts, Ohio, Tennessee and Texas. Three other companies’ cuts will also affect multiple states: Tessera Therapeutics (Colorado, Massachusetts and Washington), IO Biotech (Maryland and New York) and SonomaBio (California and Washington).
Layoffs could rise as job market awaits turnaround
Looking ahead to what may happen with biopharma layoffs during the rest of 2026, Leiderman expects they’ll be stable for now but could pick up.
“I think we may see more towards year end, when people kind of have a guess at what next year is going to look like when they have to start budgeting for ’27,” he said.
How future layoffs will affect competition for employment opportunities remains to be seen, as does the timing of when the job market will turn around.
“I would love to say, ‘Yeah, I see it’s turned the corner,’” Leiderman said. “I would love to be able to say that, but I think that might be disingenuous.”
Still, Leiderman shared some optimism when discussing funding, which is critical to the industry and, in turn, job market making positive strides.
“There’s a lot of money on the sidelines, I think, still waiting to go to work,” he said.
*Layoff numbers exclude contract development and manufacturing organizations, contract research organizations, tools and services businesses and medical device firms. To tally the cuts, BioSpace compiles data for known workforce reductions. The number of employees affected is identified or estimated primarily through information in company press releases, Worker Adjustment and Retraining Notification (WARN) Act notices, SEC filings and other media outlets’ reports or via confirmation from company officials.
Not all companies disclose downsizing, and some share only the percentage of staff affected. Some biopharmas provide total numbers retrospectively rather than disclosing individual workforce reductions as they happen.
