Novavax Says it is Axing 25% of Its Workforce to Cut Costs
Biotech company Novavax has announced that it will be laying off 25% of its workforce in an effort to reduce expenses.
The decision was made to better align the company’s infrastructure and scale with the “endemic Covid opportunity,” according to Novavax CEO John Jacobs. Despite the layoffs, the Maryland-based company is still focused on updating its Covid vaccine for the fall vaccine season.
Novavax has a modified US government agreement for up to 1.5 million additional doses of its Covid vaccine for delivery this year.
Novavax expects its broader cost reduction plan to cut costs by 40% to 50% compared to the previous fiscal year. The plan includes measures to consolidate facilities and infrastructure. The cost-cutting measures come less than a week after the World Health Organization declared that Covid is no longer a global health emergency.
However, experts suggest that the United States isn’t completely out of the woods just yet. The US public health emergency is set to end on May 11, which means that Americans may have to start paying out of pocket for Covid testing and treatment.
Novavax is the latest company to reduce its headcount to cut costs as companies brace for a possible recession and scale back their workforce after pandemic-era hiring sprees. Despite the layoffs, shares of Novavax climbed about 41% on Tuesday.
