Moderna said Thursday it plans to lay off 10% of its workforce, or more than 800 employees, as part of an ongoing effort to cut expenses amid slowing vaccine sales.
Moderna first announced last September a plan to lower $1.5 billion in annual operating expenses by 2027, largely by trimming research spending. The company planned to hit that mark without cutting into its workforce, with a spokesperson at the time calling the restructuring a “financial change” that wouldn’t involve layoffs.
In a Thursday memo to employees, CEO Stéphane Bancel wrote that the company has made “significant progress” towards that goal, in part by renegotiating supply deals and lowering manufacturing costs. But while “every effort was made to avoid affecting jobs,” the company now has to reduce its headcount, too. Bancel didn’t detail which types of roles will be affected, but revealed the company’s global workforce — which totaled more than 5,800 people in 18 countries at the end of last year — will be cut to less than 5,000.
"Reshaping our operating structure and aligning our cost structure to the realities of our business are essential to remain focused and financially disciplined, while continuing to invest in our science on the path to 2027,” Bancel wrote.
Moderna rose to stardom during the COVID-19 pandemic, bringing one of the first coronavirus shots to market and earning billions of dollars in product sales as a result. But its financial fortunes have reversed since then due to declining demand for COVID-19 shots and slow uptake for an RSV vaccine it’s also brought to market. Moderna has revised its revenue guidance multiple times amid the slowdown, too, eroding confidence in its management team and leading analysts to long expect expense cuts and layoffs.
The job cuts announced Thursday are “necessary to right-size the company’s operational footprint to offset continued vaccine revenue decline,” Leerink Partners analyst Mani Foroohar wrote in a note to clients.
The change in U.S. public health leadership this year has hurt Moderna, too. The Food and Drug Administration has implemented a stricter approval framework for COVID shots that’s resulted in narrower-than-expected clearances. Health and Human Services Secretary Robert F. Kennedy Jr. has also recast an influential vaccine committee with some members skeptical of the messenger RNA shots Moderna is known for. HHS terminated a contract with Moderna to develop mRNA vaccines for bird flu as well.
Moderna is counting on newer shots it’s developing — among them a cancer vaccine being co-developed with Merck & Co. and a combination COVID and influenza vaccine — to help change its outlook.
“Our mission remains unchanged. With three approved products and the potential for up to eight more approvals in the next three years, the future of Moderna is bright. We are sharpening our focus, becoming leaner, and staying ambitious in oncology, rare diseases and latent viruses,” Bancel said in the memo.
Moderna will report its latest quarterly results on Friday.
