Layoffs are increasing this year, and they’re not limited to any one particular industry. We’ve previously seen high-profile layoffs from fast-growing technology stalwarts, including Amazon and Microsoft. Now, we’ve learned that Merck & Co., a 133-year-old drug manufacturer, also plans job cuts.
Merck disclosed the news in a WARN (Worker Adjustment and Retraining Notification) Act filing. The WARN Act requires employers to provide 60 days’ advance written notice of plant closings or major layoffs, allowing workers to prepare for unemployment.
Merck & Co. at-a-glance:
- Founded: 1891, in New York.
- Employees: 75,000
- Revenue (2024): $64.2 billion.
The filing comes at a time when U.S. drugmakers are deep in negotiations with the White House over prices. For a long time, drugmakers have been under pressure due to the high prices of medicines that can cost tens of thousands of dollars or more per year.
Merck previously sued President Biden’s administration in 2023 over the Medicare program’s ability to negotiate drug prices, as mandated by the Inflation Reduction Act, reportedly referring to it as “kabuki theater” and “tantamount to extortion.”
More recently, President Donald Trump has argued for the U.S. to receive “most favored nation” pricing, potentially delivering a significant hit to big pharma revenue and profits. In early 2025, Merck CEO Rob Davis indicated a willingness to talk about pricing.
So far, Merck hasn’t cut any pricing deals with the White House.
Photo by Sundry Photography on Getty Images
Merck & Co preps for layoffs in New Jersey
Merck moved to Rahway, New Jersey, in 1933 from Manhattan. Over the years, employees spread beyond Rahway to various other locations within New Jersey, prompting Davis to announce in 2020 plans to consolidate operations again at the Rahway campus.
The consolidation involved relocating the company’s headquarters from Kenilworth to Rahway, as well as transferring workers from other locations, including Whitehouse Station, Madison, and Branchburg. In 2023, Merck sold its former Kenilworth campus for an undisclosed sum. AI data center powerhouse Coreweave later bought the property earlier this year for $322 million.
Related: Scott Galloway predicts AI impact on jobs
In November, Merck filed a WARN notice that it plans to lay off 204 workers at its Rahway campus in February 2026. The move follows a decision to lay off 58 workers there in August amid plans to cut 6,000 jobs to reduce expenses and boost profits.
Its plan, including workforce reductions, aims to cut costs by $3 billion annually by the end of 2027. In Merck’s second-quarter earnings report, CEO Davis and his management team estimated that reducing administrative, sales, and R&D costs would save it over $1 billion.
“In July 2025, as part of this initiative, the Company approved a new restructuring program, in which it expects to eliminate certain administrative, sales and R&D positions,” wrote Merck. “The Company expects the actions under the restructuring program to result in annual cost savings of approximately $1.7 billion.”
Merck’s CFO Caroline Litchfield added more color during the company’s Q2 earnings call.
“In terms of this $3 billion saving opportunity, that will come through productivity across
our enterprise. It will impact the R&D line, SG&A as well as cost of goods,” said Litchfield.
Merck spends billions ahead of expiring patents
Merck’s decision to cut costs to produce savings is happening as it faces key patent expiration risks tied to Keytruda, its top-selling cancer drug.
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Keytruda sales totaled over $8 billion in the third quarter; however, the drug loses exclusivity in 2028, potentially opening the company up to competition from lower-cost biosimilars. Patents also start to expire on its top-selling vaccine, Gardasil, in 2028.
Merck & Co. top selling drugs (2024):
- Keytruda: $29.5 billion.
- Gardasil/Gardasil 9: $8.6 billion
- Proquad: $2.5 billion.
- Januvia/Janumet: $2.3 billion.
- Bridion: $1.8 billion.
Source: SEC filings.
In Q3, Gardasil sales fell 24% to $1.7 billion while Keytruda revenue rose 10% to $8.1 billion. Sales of Keytruda and Gardasil totaled $29.5 billion and $8.6 billion, respectively, in 2024. Overall, Merck reported revenue of $17.3 billion in the third quarter, up 4% year over year, and net income of $5.79 billion.
With so much money at stake, Merck has ramped up its mergers and acquisitions to boost its pipeline.
In November, it agreed to buy Cidara for $9.2 billion to secure CD388, a promising long-acting antiviral agent designed to prevent influenza infections. In October, it spent $10 billion buying Verona to get its hands on Ohtuvayre, a promising COPD drug.
Related: US job market hits a new low in October
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