CEO Stéphan Bancel stated that these job cuts are necessary to align the company's cost structure with current business realities, despite efforts to avoid such measures.

This decision is part of a broader strategy to cut annual operating expenses by approximately $1.5 billion by 2027, which has already seen progress through reduced research and development costs and renegotiated supplier agreements.

As of mid-2025, Moderna faces significant financial challenges, including declining revenue and widening losses, despite having a promising pipeline of mRNA-based products.

The company has experienced a substantial drop in revenue from its Spikevax vaccine, which fell from $6 billion in 2023 to $4 billion in 2024, highlighting its vulnerability as it relies on third-party manufacturers.

In response to declining sales from its COVID-19 vaccine, Moderna is focusing on launching new mRNA vaccines, including an experimental COVID-flu combination shot.

Despite the layoffs, Bancel remains optimistic about Moderna's future, citing the approval of three products and the potential for up to eight more in the next three years.

Moderna has announced plans to lay off around 10% of its global workforce, aiming to reduce its total employees to under 5,000 by the end of 2025.

Moderna's R&D pipeline includes over 30 clinical programs aimed at developing next-generation vaccines, cancer therapeutics, and other innovative treatments.

Long-term investors are advised to monitor Moderna's progress towards its ambitious targets by 2027, while managing risks associated with its current financial state.

The stock market reflects skepticism about Moderna's ability to diversify its offerings, with its shares trading at a significant discount compared to competitors like Pfizer and BioNTech.

Recent changes in U.S. public health leadership and stricter FDA approval processes have negatively impacted Moderna's operations and management confidence.

The layoffs follow a recent withdrawal of funding from the Health and Human Services Department, which had previously supported the development of a bird flu vaccine.