Merck has announced plans to cut approximately 6,000 jobs globally as part of a broader cost-saving initiative aimed at reducing annual expenses by $3 billion by the end of 2027. According to the company, the restructuring, which was disclosed during the company’s second-quarter earnings report, will mainly affect administrative, sales, and R&D roles, and is expected to save around $1.7 billion. The company’s efforts to save money are being driven by growing concerns over the upcoming loss of patent protection for its top-selling cancer therapy, Keytruda (pembrolizumab).¹

Can Merck Maintain its Oncology Momentum While Slashing 6,000 Jobs?

In a statement to FirstWord Pharma, a spokesperson for Merck confirmed the scale of the layoffs, stating that "overall investments in our company and headcount will increase over the coming few years."

Q2 Financials Underscore the Shift

The company first revealed the cost-saving measures earlier this week as part of its Q2 2025 earnings report. Merck reported Q2 2025 revenues of $15.8 billion, down 2% year over year, primarily due to declines in vaccines and immunology products, including a 55% drop in Gardasil sales. However, Keytruda remained a growth driver, generating $8 billion in quarterly sales—a 9% increase—fueled by broader use in earlier-stage cancers.

GAAP EPS declined 18% to $1.76, while non-GAAP EPS dropped 7% to $2.13, impacted by higher R&D and restructuring costs. R&D expenses rose 16%, reflecting increased clinical activity, headcount costs, and a $200 million upfront payment to Hengrui Pharma. Merck’s non-GAAP gross margin improved to 82.2%, aided by favorable product mix. Moving forward, the company anticipates sales between $64.3 billion and $65.3 billion.²

Layoffs Part of an Industry-Wide Pattern

Merck’s sweeping layoff announcement lands amid a wave of pharma workforce cuts, with Moderna becoming the latest to unveil a major restructuring plan aimed at trimming 10% of its global headcount and operating with less than 5,000 employees by year-end.

Moderna CEO Stéphane Bancel stated that the move was a “difficult but necessary” decision to align the company’s cost structure with the evolving demands of its business. The layoffs were announced as a result of the company’s Q1 earnings, which demonstrated a revenue of $108 million, marking a year-over-year drop due to lower COVID-19 vaccine uptake and the cyclical patterns of its respiratory portfolio.³

Merck and Moderna are part of a growing list of pharmaceutical companies navigating workforce reductions amid industry-wide cost-cutting efforts this year. In June, Bristol Myers Squibb (BMS) announced its fourth round of layoffs this year, aiming to cut 68 positions between September 2025 and October 2026 at its facilities in Lawrenceville, NJ.

To date, the company has cut over 1,300 jobs this year as part of an ongoing restructuring effort. BMS also announced in February plans to cut approximately $2 billion in costs by the end of 2027.⁴

Novartis joined the wave of industry cutbacks earlier this year, unveiling a significant workforce reduction tied to shifting commercial priorities and looming patent expirations. In March, the company revealed that it was laying off 427 employees from its East Hanover, NJ headquarters. The company cited the impending loss of patent exclusivity for Entresto, its leading heart failure medication, as a major factor in its decision.⁵

A Post-Keytruda Future in Sight

With nearly $8 billion in quarterly sales from Keytruda alone, Merck remains a leader in oncology, but the clock is ticking on its patent exclusivity. By eliminating 6,000 roles while simultaneously increasing investment in growth areas, the company is betting that a leaner, more focused operation will better position it for a post-Keytruda era.^1,2

References

1. Merck & Co. to cut 6000 jobs in latest cost-saving effort. FirstWord Pharma. July 31, 2025. Accessed August 1, 2025. https://firstwordpharma.com/story/5985444
2. Merck & Co., Inc., Rahway, N.J., USA Announces Second-Quarter 2025 Financial Results. Merck. July 29, 2025. Accessed August 1, 2025. https://www.merck.com/news/merck-co-inc-rahway-n-j-usa-announces-second-quarter-2025-financial-results/
3. Moderna to Reduce Workforce by 10% Amid Cost Restructuring. PharmExec. August 1, 2025. Accessed August 1, 2025. https://www.pharmexec.com/view/moderna-reduce-workforce-10-cost-restructuring
4. Bristol Myers Squibb plans 4th round of 2025 NJ layoffs (updated). NJBiz. June 30, 2025. Accessed August 1, 2025. https://njbiz.com/bristol-myers-squibb-2025-nj-layoffs-lawrenceville/#:~:text=A%20fourth%20wave%20of%20layoffs,September%202025%20and%20January%202026.
5. Novartis Announces 427 Layoffs Amid Strategic Restructuring and Patent Challenges. Parsippany Focus. March 21, 2025. Accessed August 1, 2025. https://parsippanyfocus.com/2025/03/21/novartis-announces-427-layoffs-amid-strategic-restructuring-and-patent-challenges/?utm_source=chatgpt.com