The financial crisis now gripping the world has caused many companies in the financial services, retail, and manufacturing sectors to lay off millions of employees. Every month, thousands more lose their jobs, many of them professionals and knowledge workers. Although scientists typically fare better than most during tough economic times, more than a few scientists find themselves among the newly unemployed.
Among the industries apparently affected by the financial crisis is the life sciences industry. Start-up and small to midsized companies are taking hard hits: The 164-employee Dyax announced 60 layoffs on 31 March, and in February, KV Pharmaceuticals announced 1700 layoffs. Big pharma is not immune: Some 80,000 pharmaceutical employees have lost jobs recently--and that was before Pfizer announced that 800 employees, including many scientists, are to be laid off from its global R&D unit in 2009. Productless, unprofitable biotechnology companies are starving, and some are failing.
Finding a job takes more time and effort than it has for decades, and some analysts even advise well-employed postdocs to stay put and wait for better times before going on the market. But others say job seekers just have to work harder and make a stronger case for themselves if they want to find employment in the life sciences industry.
Pharmaceutical executives blame many of the industry's 80,000 layoffs on current financial troubles (Table 1). But industry insiders think the fault lies instead with companies' less-than-stellar prospects for future profits. "The financial crisis is not the major challenge," says Erik Gordon, a professor at the Ross Business School at the University of Michigan, Ann Arbor, and leading life sciences industry analyst. "The major challenge is getting sufficient return on investment from pipelines that contain riskier, expensive products in the face of downward pricing pressures and diminishing revenues from products nearing patent expiry."
"These layoffs were going to occur anyway; these companies simply got too big," agrees Jeffrey Clark, CEO of Beaker.com, an online bioscience community specializing in career development and job placement for bioscience professionals. "They are using the financial crisis as an excuse to reduce head count in anticipation of losses expected to begin in 2011 when patents on blockbuster drugs begin to expire." Big pharma's financial statements seem to suggest that those companies, or at least their cash reserves, are healthy (Table 2). Yet, more layoffs are expected at pharmaceutical companies, at least through 2010.
One way pharmaceutical companies are dealing with the problems they face is consolidation. Beginning in early 2007, pharmaceutical companies started to explore acquisitions and mergers as a way of bolstering their flagging drug-development pipelines. This culminated in three major deals in the past 6 months: Merck's merger with Schering-Plough, Pfizer's acquisition of Wyeth, and Roche's buyout of Genentech (Table 3).
Consolidation will result in some layoffs, but the "people who will be affected most by consolidation are in sales and administration," Gordon says. "Some researchers will be made redundant by mergers or acquisitions, but most will probably be okay."
Nevertheless, "there is a lot of anxiety out there" among scientists, Clark says. "I get daily phone calls from anxious Ph.D.s who simply cannot find work. The job market is extremely challenging right now."
But the news isn't all bad. Some companies, such as Genzyme, German drugmaker Merck Serono, and Gilead Life Sciences, are taking advantage of the current talent glut. Eric Celidonio, a corporate recruiter for Merck Serono, says, "If job candidates possess relevant and innovative skills in certain therapeutic areas, we will hire them. There is an amazing pool of talented scientists out there right now."
In the late 1990s, pharmaceutical companies began to divert resources from research and development toward attempts to increase revenues from the sale of existing blockbuster drugs. This change of strategy was provoked by the increasing complexity and difficulty of discovering and developing new drugs and by skyrocketing drug-development costs.
The decision to cut back on R&D opened the door for smaller and more research-focused biotechnology companies, many arising out of academic laboratories, to develop their own products with the hope of entering into lucrative licensing deals or being acquired by larger drugmakers. Unfortunately, most of these companies are still unprofitable and strapped for cash.
Some of these companies still have access to venture-capital money, says Novartis's Campbell Murray, but investors are interested in only the most promising companies. "Companies that are developing innovative products and have hit their milestones will do fine because investors reward success," Murray says. "Companies that were on the cusp before the financial crisis will not fare so well, and many will fail or be acquired" on unfavorable terms, he adds.
G. Steven Burrill, founder and CEO of Burrill and Co., a leading boutique investment firm, predicts that the number of publicly traded U.S. biotech companies will shrink from more than 330 to about 250 and that many privately held companies will fail in 2009. If that happens, a lot of small-company scientists will be dumped back onto the job market, and many new jobs that might have been created won't be. That's bad news for scientists entering the job market.
Indeed, recent layoffs have already created a market rich in scientists with experience in industry--especially the pharmaceuticals industry. That could make it difficult for Ph.D.s and postdocs to compete for biotechnology jobs straight out of academia, some say. But not everyone agrees. Sally Churcher, senior director of strategic staffing at Genzyme, insists that many positions in the industry don't require such experience. "The perception that prior industry experience is required for all entry-level positions is inaccurate. Some R&D jobs require industrial experience, whereas others don't. We try to hire scientists that represent the best fit for our organization."
"Prior industry experience isn't always a plus" for people seeking jobs at Merck Serono, Celidonio adds--especially when it's in the wrong industry. "Biotech is very different than pharma, and sometimes ex-pharma employees have trouble adapting."
The verdict on today's biotech industry: Some biotech companies are hiring. Even scientists without industrial experience--but with skills that fit the position precisely--can find good jobs. Yet hiring has slowed and competition for jobs has increased. Companies are becoming more "thoughtful about the people that they hire," says Genzyme's Churcher. Landing a job in biotech is possible, but the market is tough.
Medical devices and diagnostics
The medical devices and diagnostics (MD&D) sector continues to perform well despite the economic downturn. "There haven't been major layoffs at the big devices companies, and many are still aggressively recruiting new talent," says Clark. Although many see the MD&D industry as less desirable than its better-known cousins (pharma and biotech), a job at a MD&D company is better--far better--than no job at all. MD&D employment can provide life scientists with the opportunity to acquire new skills that will make them more competitive as the job market improves, Celidonio says. "I don't think scientists should turn down any job in this environment. ... It's time to think strategically and pragmatically about the future."
Looking to the future
Job seekers ready to enter the market have some tough decisions to make. "I would advise graduate students and postdocs to stay put until the job market loosens up a bit," Celidonio says. Clark suggests looking into summer internships at biotechnology companies to build experience while waiting out the downturn--or even retraining for new careers in law, business, or medicine.
But Gordon and Murray--both industry advocates--advise life scientists to stay put. "Life scientists should continue to strive to be the best in their fields and remain conversant about the latest, cutting-edge technologies. A mediocre or partly out-of-date scientist who gets a business or law degree doesn't bring particular value to the table," Gordon says. "Scientists have a critical role to play in the future of the life sciences industry," Murray adds. "Without them, it wouldn't be possible to sustain the industry."
Those who decide to enter the job market now will have to work harder and be stronger (or luckier) than they have had to be in previous years. "The days of applying for life sciences jobs online and hoping for an interview are long gone," Celidonio says. Instead, he says, job seekers must learn to brand themselves and aggressively market themselves to prospective employers. He recommends a combination of traditional networking--attending scientific meetings and industry-sponsored social events--and online networking using LinkedIn, Facebook, and Twitter to "get a foot in the door."
"In my experience, 90% of all job placements result from personal referrals," Clark adds. "Life scientists simply must learn to network more effectively."
Cliff Mintz is founder of BioCrowd, a new social networking site for bioprofessionals.