Novavax announces 25% reduction in workforce amid financial constraints and tepid demand for COVID-19 vaccines
Layoffs
May 9, 2023
May 9, 2023
Novavax, the biotechnology company that developed a COVID-19 vaccine, announced on Tuesday that it will reduce its global workforce by 25% as part of its ongoing cost-reduction measures. This move is expected to result in the layoff of about 498 jobs out of the 1,992 full-time employees as of Feb. 21. The decision was made as the company faces financial constraints while dealing with tepid demand for its COVID-19 vaccines.
Novavax had earlier stated significant uncertainty around revenue generation for the year. It expects its total annual revenue to range between $1.4 billion and $1.6 billion, which relies on a timely launch of its updated COVID shot. However, for the first quarter of 2021, the company reported a net loss of $293.9 million, compared with a year-ago profit of $203.4 million.
Novavax's COVID-19 vaccine is the only marketed product for the company after 35 years in business. The company is hoping to stay afloat by implementing cost controls and through the success of its COVID/flu combination vaccine candidate trial. The biotech anticipates its cost-cutting measures to help reduce its annual research and commercial expenses by 20% to 25% compared to the previous year.
According to the company's latest regulatory filings, Novavax had $637 million in cash and equivalents at the end of the quarter, which is significantly lower than the $1.3 billion it had as of Dec. 31. These figures indicate that the company is under financial strain and is trying to cut costs to stay viable.
Members of LevelFields received the alert of this event on May 9, 7:20 AM ET
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