Vaccine Market Pressures Force Restructuring
Moderna announced Thursday that it plans to reduce its global workforce by approximately 10% before the end of the year. The company, which had around 5,800 full-time employees across 18 countries as of December 2024, expects to end 2025 with fewer than 5,000 staff members. The layoffs are part of a broader effort to align operating costs with declining demand for its COVID-19 vaccine products.
The decision comes as vaccine sales continue to fall short of expectations, compounding financial pressure on the biotech firm. In May, Moderna reported first-quarter revenue that failed to meet Wall Street forecasts, contributing to a share price decline of over 20% so far this year.
Focus on Cost Reduction and Streamlining
Moderna CEO Stéphane Bancel informed employees via internal memo that the restructuring is necessary to ensure financial discipline while the company continues to invest in its research pipeline. The memo outlined significant progress in reducing research and development spending, renegotiating supplier contracts, and cutting manufacturing expenses.
These workforce reductions follow a previously announced initiative to reduce annual operating expenses by $1.5 billion by 2027. The company said it has scaled back investment in late-stage clinical trials for respiratory treatments and is shifting resources to more promising product areas.
Regulatory and Market Uncertainty Ahead
Moderna is also navigating new challenges in the regulatory landscape, particularly under Health and Human Services Secretary Robert F. Kennedy Jr., whose policy direction may affect vaccine distribution and access in the United States. These uncertainties have added complexity to the company’s outlook in an already cooling global vaccine market.
Despite these headwinds, the company remains optimistic about its long-term prospects. In May, the FDA approved Moderna’s third product, a next-generation COVID-19 vaccine. The firm is forecasting as many as eight additional product approvals within the next three years, which could revitalize growth.
Leadership Message and Outlook
“This decision was not made lightly,” Bancel stated in the memo, acknowledging the contributions of employees affected by the restructuring. He reiterated that the company’s strategy is focused on long-term sustainability and innovation, and thanked team members for their role in building the organization’s success.
Moderna is expected to provide further detail on its operational strategy and financial outlook during its upcoming quarterly earnings release.
