In 2025, biopharma layoffs showed no signs of slowing, instead rising 16% year over year.
Last year was challenging across the board. In a time that was expected to usher in some sort of recovery from the yearslong biotech bear market, the era instead was met with intense volatility. The instability peaked in April, with the XBI—a stock index of U.S. biotech companies—bottoming out April 4 at $66. The yearly low succeeded President Donald Trump’s Liberation Day Tariffs announced April 2.
During that time, investors drew back. That trend correlates with the year’s layoff peak in May, when 29 different companies reported workforce reductions—an all-time monthly high in our time tracking industry layoffs.
No other month matched the fervor of May, though March and August came close, with 26 rounds reported during each.
But the attrition can’t continue at the same brisk pace (don’t worry, I knocked on wood), with a gradual slowing of cuts starting in September. The first two quarters of the year brought in 64 layoff rounds each, with the third quarter trailing closely behind with 62 rounds and the fourth quarter coming in at 33.
The second half of 2025 also saw a slow recovery of the XBI, which hit its yearly high at $126.30 on Dec. 24.
What we’re seeing is, in part, is the rightsizing of the sector after 2021’s influx of players and cash. Many companies that received funding during the high highs of COVID-19—when investors were throwing hundreds of millions into biotech—expanded too fast and are now being forced to scale back and return to the inherently lean nature of the sector.
Furthermore, a plethora of programs fueled by COVID cash are reading out. And more readouts means more failures, numerically, prompting layoffs and sometimes even closures.
While 2026 will surely bring more layoffs, William Blair analysts believe 2026 could carry forward the industry’s current momentum—as long as strong clinical data continue to be rewarded and companies can bring drugs to market without major government pricing regulations.
For 2025 layoff analyses by quarter, click here:
Biopharmas laid off staffers at least 63 times in Q1: Fierce Biotech analysis
Biopharma layoffs for first half of the year jump 32% YOY
Q3 biopharma layoffs hold steady, setting 2025 up to break last year's high