Biotech Firm Amgen To Layoff Additional 450 Employees Amid Inflation Woes

Biotechnology firm Amgen Inc on Thursday announced that it is cutting about 450 jobs, less than 2% of its workforce, in a second round of layoffs this year.

The California-based biopharma had about 25,000 employees in more than 50 countries as of Dec. 31, 2022, according to its latest annual regulatory filing with the U.S. Securities and Exchange Commission (SEC).

Amgen, the largest employer in Ventura County, made these changes to realign their expenditure amid "intensifying pressure on drug prices and high levels of inflation" in the healthcare industry, a company spokeswoman said in a statement to Reuters.

While exact details regarding which departments and locations will be affected by the decision haven't been disclosed by the pharma company, the spokesperson said "various functions" will bear the brunt of the layoffs, which are set to begin on March 31.

Megan Fox, the director of corporate affairs at Amgen, told PAC Biz Times that less than 5% of the jobs in the Thousand Oaks office have been impacted.

The company added that impacted employees will be provided severance and transition benefits.

"We know this is a challenging time for each person impacted. We will support staff leaving Amgen by offering transition services and severance, ensuring they are treated with respect for their contributions," Fox told the outlet.

In January, Amgen laid off about 300 employees as part of organizational changes, which "mainly" impacted the U.S.-based commercial team. "We made these changes to better manage against industry headwinds so that we can continue to deliver value for our patients, staff and shareholders," the company said in a statement at the time.

Last November, Amgen pointed out that the Inflation Reduction Act (IRA) could impact its business in the future. "The IRA's drug pricing controls and Medicare redesign is likely to have a material adverse effect on our sales (particularly for our products that are more substantially reliant on Medicare reimbursement), our business and our results of operations," it had said in an SEC filing, according to Endpoint News.

The layoff announcement has come days after reports came to light that Amgen is being sued for failing to inform investors sooner that it might owe the Internal Revenue Service (IRS) more than $10 billion in taxes and penalties, Fierce Pharma reported.

A Detroit-based pension fund filed a complaint against the biotech firm in a Manhattan federal court earlier this week, saying that Amgen artificially inflated its stock price between July 2020 and April 2022 by concealing its massive tax bill.

Amgen, on the other hand, said in August 2022 its tax setup was caused by "contributions made, the risks taken and the significant equity value of our Puerto Rico subsidiary."

In 2022, the biotech company generated revenues worth over $26 billion, 70% of which came from product sales in the U.S. and the remaining from 100 other countries.