Monday, November 4, 2019

What is this layoff season going to look like?

Because I don't fully understand the rhythms of the American corporate machine just quite yet, it has taken me a number of years to fully understand why we have layoffs in November and December, around the time of Thanksgiving and Christmas. Nowadays, I better understand that it is about third quarter results, and the reactions of corporate officers to either a good year (no layoffs, ideally) or a bad year (start cutting jobs now.) It's November now, and here we go with Amgen (via FiercePharma): 
As Amgen rides the wave of hype and hope for its early-stage KRAS effort as well as other cancer assets in its pipeline, this is pushing out its work on neuroscience. 
To that end, the biopharma company is looking to slim down its efforts in that area, which could see nearly 200 jobs at risk, as it moves away from its neuro work in Cambridge, and focuses more on its R&D on the West Coast. 
Also, from last month in the Philadelphia Inquirer
Merck, the international pharmaceutical giant, announced mass layoffs that will hit its sales personnel based in suburban Philadelphia. 
About 500 people affiliated with Merck’s offices in Lansdale and Upper Gwynedd will lose their jobs in permanent reductions in force, the company said in a required letter it filed Wednesday with the Pennsylvania Department of Labor and Industry... Earlier this month, Johnson & Johnson said it planned to eliminate 297 employees at its Wayne facility, in a similar letter sent to the Department of Labor.
Overall, according to Challenger, Gray and Christmas's layoff report, layoffs in the pharmaceutical industry are up 4.6% this year from 2018. We'll have to see how this goes. At the same time, Friday's jobs report numbers were pretty decent (via The New York Times): 
The American jobs engine has been beaten and battered, but it just keeps chugging along. 
Employers added 128,000 jobs in October, the Labor Department said Friday, and revisions to prior months’ data tacked on another 95,000. The figures for October would have been stronger had it not been for the strike at General Motors, which shaved close to 50,000 workers from the employment rolls, and for the layoff of some 20,000 temporary census workers. 
The unemployment rate ticked up to 3.6 percent, still near a half-century low.
If we're going to have a classic recession, we'll see decreases in jobs in November and December. While my intuitions are entirely leaning towards the thought that there will be a recession of some kind next year (i.e. visible declines in the topline jobs numbers and/or negative quarters of GDP), we haven't seen those signs yet in the broader economy. It will be very interesting to see if we see evidence of declines in hiring in the chemistry/pharma market.

4 comments:

  1. Merck is laying off salespeople instead of chemists?! What, did hell freeze over?

    ReplyDelete
  2. https://www.biospace.com/article/halozyme-pancreatic-cancer-drug-fails-in-phase-iii-company-reorganizes-and-slashes-staff/

    ReplyDelete
  3. I've had friends at a previous company get laid off a couple weeks ago, and heard of a couple more layoffs second hand. It's not feeling comfy cozy in the plastics world right now.

    ReplyDelete