Novartis Is Making Money Hand Over Fist. So Why Is It Firing Scientists?

Meanwhile, Novartis' Biomedical Research organization still employs about 5,720 people. So these cuts aren't gutting the place. They're more like a gardener trimming back branches so the strongest ones get more sunlight.

The Real Play: Let Someone Else Discover It

If Novartis is cutting internal discovery staff, where does the innovation come from? Increasingly, from the outside.

This is the bigger story behind the layoffs. Novartis is betting that it can source early-stage innovation more efficiently by partnering with biotechs, licensing clinical-stage assets, and making targeted acquisitions. In February 2025, it grabbed Anthos Therapeutics for $925 million to pick up abelacimab, a next-generation blood thinner for atrial fibrillation patients. That deal deepened its cardiovascular portfolio without requiring years of internal discovery work.

Even more telling: Novartis announced a staggering $23 billion, five-year U.S. investment plan in April 2025. Seven new facilities. Four manufacturing plants. A $1.1 billion R&D hub in San Diego. New radioligand therapy sites in Florida and Texas. End-to-end U.S. manufacturing for siRNA (a type of RNA-based medicine that silences disease-causing genes).

The message is clear. Novartis wants to build things and make things in the U.S. It wants world-class manufacturing for cutting-edge drug types: radioligand therapies, RNA medicines, biologics, cell and gene therapies. What it wants less of is a sprawling internal discovery operation that places dozens of exploratory bets across every disease imaginable.

This Isn't Just a Novartis Thing

Zoom out, and you'll see the same playbook running across Big Pharma. Pfizer is leaning harder on deal-driven pipeline replenishment. Roche is tightening procurement discipline on R&D spending. The whole sector is converging on a single philosophy: focus internally, source innovation externally, manage costs aggressively.

The reasons are stacking up. Patent cliffs are hitting multiple blockbusters simultaneously. Interest rates squeezed biotech funding for years, making startups cheaper to acquire. U.S. drug pricing pressure adds urgency to every margin calculation. And AI-driven tools are making it easier to evaluate external assets quickly.

For small biotechs, this trend cuts both ways. On one hand, Big Pharma's appetite for deals has never been stronger; if you have a clinical-stage asset in oncology, neuroscience, or cardiovascular disease, your phone should be ringing. On the other hand, the talent flooding out of places like Novartis is creating a deeper hiring pool for startups willing to build.

What Wall Street Makes of All This

Analysts aren't panicking. The research cuts are incremental, not existential, and they fit a restructuring story that Novartis has been telling since 2022. Most sell-side models won't change much based on a "select number" of biomedical research layoffs.

The real test comes later. Novartis has reaffirmed its 2026 guidance: low single-digit sales growth, low single-digit decline in core operating income. The company is essentially telling investors that 2026 is a transition year; the generic erosion (especially from Entresto) hits hardest in the first half, and the growth drugs should carry more of the load by year's end.

If those growth brands keep their trajectories, this strategy will look smart. If any of them stumble, or if the pipeline thins because too many early programs got cut, the calculus changes entirely.

The Bottom Line

Novartis isn't firing scientists because it's broke. It's firing scientists because it thinks it can get better science from the outside. That's a massive bet on a model where Big Pharma becomes less of a discovery engine and more of a development, manufacturing, and commercialization machine.

It's also a bet that the biotech ecosystem will keep producing innovations worth buying. Given how many small companies are struggling for funding right now, that assumption seems reasonable. But ecosystems are fragile things. Cut enough branches, from enough trees, across enough companies, and eventually you might find there's less growing than you expected.

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