A recent report on the U.S. Life Sciences sector delivered both good and bad news when it came to employment.
First, the good news: Employment reached a record high of 2.1 million jobs at the start of this year, the commercial real estate firm CBRE reported in its 2023 U.S. Life Sciences Outlook, released earlier this month. However, the pace of biotech job growth had slowed to 4.1% in January from 6.3% a year earlier. Already this year a spot check by GEN shows 61 companies disclosing layoffs as of April 10, vs. 37 during the same period a year ago.
A more dramatic illustration of that slowdown can be seen in a declining average number of jobs added per month as measured by CBRE. That average has slid 70%, from 11,144 jobs between June 2020 and June 2022, to 3,378 jobs between July 2022 and January 2023. The 2020–2022 average was skewed by a wave of hiring and activity by biotech in the year following the onset of COVID-19, since the average was 6,259 in pre-pandemic 2018–2019.
CBRE blames the employment decline on rising interest rates and the slowdown in public and private funding for the life sciences. On the public side, only five U.S. biotech priced initial public offerings (IPOs) in the first quarter, totaling $382.5 million—most of that reflecting IPOs of $192 million (psychotropics contract manufacturer Lucy Scientific Discovery, February 9) and $161 million (Structure Therapeutics, whose small molecule drugs target G-protein-coupled receptors, February)—compared with eight U.S. and
European companies totaling about $744 million in Q1 2022.
As smaller biotech avoid the IPO market, they are expected instead to fuel a new wave of mergers and acquisition (M&A) activity by biopharma giants which are often better poised to grow the workforces of the companies being snapped up.