Novavax says it is axing 25% of its workforce to cut costs
Novavax is laying off 25% of its workforce to slash expenses
By Krystal Hur, CNN
Novavax is laying off 25% of its workforce to slash expenses, the biotech company said Tuesday.
“Reducing our workforce has been a difficult decision, but we believe it was necessary to better align our infrastructure and scale to the endemic Covid opportunity,” said John Jacobs, Novavax chief executive, in a press release accompanying the company’s first-quarter results.
Still, the Maryland-based company said it’s focused on updating its Covid vaccine for the fall vaccine season, citing a modified US government agreement for up to 1.5 million additional doses of its Covid vaccine for delivery this year.
Novavax expects its broader cost reduction plan, which also includes measures to consolidate facilities and infrastructure, to cut costs by 40% to 50% compared to the previous fiscal year.
The company’s cost-cutting measures come less than a week after the World Health Organization declared that Covid is no longer a global health emergency, though experts say the United States isn’t completely out of the woods just yet.
The US public health emergency is set to end on May 11, meaning Americans could have to start paying out of pocket for Covid testing and treatment.
Novavax is the latest company to reduce its headcount to cut costs as companies brace for a possible recession and scale back their workforce after pandemic-era hiring sprees.
Shares of Novavax climbed about 41% on Tuesday.
The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
