Layoffs Hit California Biopharma Companies

January was a rough month for many pharma employees in California, as several companies pulled the trigger on layoffs, or announced coming layoffs that will affect hundreds of employees.

South San Francisco mainstay Genentech, a Roche company, announced additional cuts. On Jan. 24, the company filed a notice showing 67 layoffs would begin effective March 29. The company noted in the WARN notice that the layoffs were permanent. Nadine Pinell, Genentech’s principal manager of corporate relations said the layoffs, which she described as a difficult decision, will cover multiple departments at the company.

In an email to BioSpace, Pinell said the company has been evaluating its operations to ensure it remains well-positioned to meet the needs of patients and deliver on its pipeline.

“As a result of this process, we have made the difficult decision to eliminate some positions,” Pinell said. “At Genentech, we pursue groundbreaking science to develop breakthrough medicines for people with serious diseases. The success of our business depends on our ability to respond to change, appropriately allocate resources, and manage our operations efficiently.”

Pinell added that the company appreciates the contributions of its employees who have been impacted by the job cuts. She said Genentech will support them through the transition with financial benefits, extended healthcare coverage, and career coaching.

The layoffs set for March follow 83 job cuts the company made late in 2018. At the time of those cuts, Pinell made a similar comment to BioSpace regarding the layoffs. In August 2018, the company also announced 223 job cuts in South San Francisco.

Also making cuts is Merck Sharp & Dohme. According to a WARN notification issued Jan. 18, the company will cut 20 employees in Palo Alto as part of a closure.

For 2019, layoffs in California began in January with Aduro Biotech, which announced it was cutting 37 percent of its staff as part of a corporate restructuring. The company said it will institute a “strategic reset” to focus on its core strengths of the discovery and development of novel product candidates in the stimulator of interferon genes (STING) and a proliferation-inducing ligand (APRIL) pathways. The money it saves from cutting a third of its employees will be used to support development of the company’s lead programs, Aduro said in January.

Aduro isn’t the only California company to make job cuts. Pharma giant Pfizer will execute the shift of 100 jobs from South San Francisco to La Jolla. First announced in December, Pfizer said that the plan to shift the jobs from the Bay Area to the San Diego area was part of an effort to “simplify the organizational structure and footprint of our oncology research unit.” By consolidating its oncology programs between the two sites, Pfizer said it will be “better positioned” to take advantage of “the critical mass needed to more rapidly deliver innovative targeted and immunotherapeutic medicines to patients in need.”

Also making cuts this year is Theravance Biopharma. The Ireland based company announced plans to cut one employee in the Los Angeles area and 49 in South San Francisco. Those cuts are expected to go into effect on March 8, according to the WARN notice. Theravance announced its workforce reduction in January as part of an effort to align with its focus on continued execution of key strategic programs. The employees begin cut by Theravance primarily focused on early research or the infrastructure in support of Vibativ (telavancin). Vibativ is a marketed antibiotic recently sold by the company to Cumberland Pharmaceuticals, Inc. Cumberland acquired the drug for $25 million in November 2018.