The announced reduction of hundreds of staff came a day ahead of Moderna’s Q2 earnings report.
Moderna is downsizing its workforce by 10% globally to bring headcount to under 5,000 in “a difficult moment for the company,” CEO Stéphane Bancel told employees in a note Thursday morning.
In the letter, Bancel detailed the decision to cut employees as part of Moderna’s overall cost-cutting efforts that began earlier this year. The famed mRNA biotech is looking to reduce annual operating expenses by about $1.5 billion by 2027. While progress has been made in scaling down R&D, renegotiating supply agreements and reducing manufacturing costs, Bancel said ultimately the cuts turn to staffing.
“Every effort was made to avoid affecting jobs,” the CEO wrote. “But today, 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.”
Moderna has 5,800 employees, according to S&P Capital IQ.
At the end of the first quarter, Moderna announced the $1.5 billion cost savings target, which added to an existing plan to slash R&D spending by $4 billion by 2028. The company has been battling political headwinds for its vaccine program, a declining COVID-19 vaccine franchise, a hold on its norovirus program and deprioritizations in the pipeline.
Still, Bancel said in his letter that the company is committed to driving toward eight product launches in the next three years. Moderna will report earnings on Friday morning.
