As a pharma employee, your career decisions have a big impact on your financial future.
Changing jobs can influence everything from your salary to your retirement benefits to how much you spend on housing.
If you’ve been thinking about making a change, you might ask: is now the right time? What does the state of pharma hiring look like?
I always try to be optimistic – but I also believe in being honest.
And the honest answer is that pharma is going through a bit of a rough patch right now.
The good news though, is that I think recovery might not be too far away…
Recovering From a Tough 2023
There’s no getting around it – 2023 was a tough year for pharma employees.
In the immediate aftermath of the Covid vaccine rollout, the pharmaceutical industry saw a surge of optimism, especially around the potential of emerging mRNA technology.
And what do companies do when they feel optimistic about the future? They hire – a lot.
According to the BLS, total nationwide employment in pharmaceutical and medicine manufacturing grew by about 44,000 employees between 2020 and 2023, while the average annual salary jumped by about $12,000.
But before long, the party started to look premature. Like many industries, pharma was hit by the double whammy of rising interest rates and falling investor enthusiasm.
As a result, companies looked at all those expensive employees they had just hired – and decided they may have jumped the gun.
By 2023, industry layoffs started to accumulate, including at many major pharma companies.
Amgen, Roche, Novo Nordisk, Pfizer, and Johnson & Johnson were just a few of the big names that navigated staff cuts last year.
This year has brought some encouraging signs of improvement – but the situation is still far from perfect.
The Tide of Layoffs May Be Turning
Business and economic cycles often work like tides in the ocean…
While high tide always comes eventually, it takes a while for low tide to actually fade away – change is gradual, not instant.
Right now, the pharma industry is still in a state of low tide. Unfortunately, the first half of 2024 brought continued reports of shrinking budgets and staff cuts.
In the spring, Bayer, Novartis, and Bristol Myers Squibb all announced their own substantial layoff plans. Other pharma companies followed with a host of smaller headcount reductions.
Amidst this bad news, it might seem hard to find a silver lining.
But while layoffs are still occurring, the pace of those layoffs has fallen since early 2023.
For evidence of this, we can look at data collected by CBRE, which has kept track of employment trends in the life sciences industry (of which pharma is a part).
CBRE found that the number of life sciences companies announcing layoffs appears to have peaked in early 2023 and was already declining by the end of the year.
Chart: CBRE
What’s more, CBRE also saw a noticeable jump in the number of active pharma industry job postings at the start of 2024.
Of course, it’s tough to interpret any level of pharma layoffs as a good thing…
But here’s how I look at this data: even if the picture isn’t as rosy as it could be, the employment tide is finally starting to shift for the pharma industry – and high tide could be just around the corner.
Plus, recent expansion announcements coming out of the pharma sector are creating even more reason to be optimistic.
Pharma Expansion Announcements in 2024
In the near term, employment trends tell us a lot about the state of the pharma industry – but they’re not the full story.
It’s also helpful to see where companies are spending their cash, especially when it comes to high-budget investment projects.
From a pharma company’s perspective, hiring new employees is a cheap signal of optimism – because it’s not all that costly to lay off a worker.
In contrast, spending hundreds of millions of dollars on a new facility is an expensive signal of optimism – because you can’t just “fire” the facility if you decide you were overoptimistic.
That’s why I think it’s such a good sign that I’ve been seeing a string of major pharma expansion initiatives in my inbox lately:
- Amgen recently unveiled their newly completed $365 million biomanufacturing facility in Ohio
- AstraZeneca announced a $300 million investment into a new Maryland campus in February
- SCHOTT Pharma is planning a $370 million drug delivery manufacturing facility in North Carolina
And the list goes on…
Arguably, these plans are an even stronger signal about the industry’s future precisely because pharma is in a slump right now.
It’s easy to approve big expansion plans when everyone’s optimistic – but it’s harder to do so when even some peers are still authorizing layoffs.
The Bottom Line: Be Patient but Hopeful
Clearly, the pharma industry isn’t out of the woods yet.
While big-ticket expansion plans and the declining pace of layoffs indicate that the situation is improving, we’re still some ways away from the optimistic heights of 2021 and 2022.
For pharma employees who might be looking to change things up, my advice is: be patient.
Even if you can secure a new offer right now, it might be a smart strategy to wait for a better hiring environment so you can negotiate from a stronger position – a rising tide lifts all boats.
Whatever you decide, remember that I’m here to offer financial guidance as you weigh your career prospects.
If I can help offer some personalized guidance in an employment transition, feel free to reach out and set up a call today.
In the meantime, I have another resource you might find helpful…
I wrote an eBook with investment tips tailored specifically for pharma employees.
It highlights just some of the guidance I’ve offered clients over the years.
It’s completely free and you can download it here now.
