Moderna Cuts 10% of Its Staff as Cash Hoard Dwindles

Stéphane Bancel, CEO of Moderna, has said the company will bleed cash for a few years before becoming breaking even. (SAUL LOEB/AFP via Getty Images)

Moderna told employees Thursday morning that it plans to cut 10% of its workforce, a significant blow for a company that became the best-known biotech in the world during the Covid-19 pandemic.

The layoffs come as Moderna’s dwindling cash hoard has raised worries on Wall Street that the company may need to raise new capital, diluting the holdings of current shareholders.

In a note shared with employees and posted to the company’s blog on Thursday, CEO Stéphane Bancel said that Moderna will reduce its headcount to below 5,000 employees globally by the end of the year. It reported approximately 5,800 workers as of the end of 2024.

“Earlier this year, we committed to reducing our annual operating expenses by approximately $1.5 billion by 2027,” Bancel wrote. “We’ve made significant progress by scaling down R&D as respiratory trials conclude, renegotiating supplier agreements, and reducing manufacturing costs. Every effort was made to avoid affecting jobs.”

Moderna shares are down 22.7% this year, and 73% over the past 12 months. The company had $19.3 billion in cash in early 2022, but has been losing billions of dollars each year since 2023 as the Covid-19 vaccine market has dried up.

The company now expects to have a cash balance of $6 billion at the end of this year. Bancel has insisted that the company will stop losing money in 2028, and he won’t need to raise new cash.

“We have a lot of work going on in cost, and we are on track, even ahead of plans, in terms of cash management,” Bancel told Barron’s in May. “What we are doing is, this year, being in a cost structure where we are going to be losing around $3 billion of cash, next year $2 billion, the year after one, and then break even.”

Analysts aren’t convinced.

“Cash breakeven in 2028 remains an ambitious goal,” Mani Foroohar, analyst at Leerink Partners, wrote in May.

Sales of Moderna’s Covid-19 vaccine are declining, while sales of its respiratory syncytial virus vaccine are anemic. The company has a packed pipeline, but many of the programs need time to play out.

In the meantime, the political backdrop is increasingly challenging, as Robert F. Kennedy Jr.’s Department of Health and Human Services had yanked nearly $600 million in bird flu vaccine funding promised to Moderna, and has narrowed access to new Covid-19 shots.

“Our mission remains unchanged,” Bancel wrote Thursday. “With three approved products and the potential for up to eight more approvals in the next three years, the future of Moderna is bright.”

Wall Street, for the most part, doesn’t agree. Of the 28 analysts tracked by FactSet who cover the stock, only six rate it Buy or Overweight.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com