An Unexpected Company Is Now Laying Off 600 in Massachusetts

May 25, 2024

An unexpected company is now laying off 600 in Massachusetts, part of a restructuring plan to reduce its costs.

Takeda Pharmaceutical, the largest drug maker in Massachusetts by headcount, on Friday confirmed that it plans to lay off 641 employees in the state between early July and next March.

Some 495 layoffs will be in Cambridge and 146 in Lexington, according to a filing by the Tokyo-based drug giant with the state Executive Office of Labor and Workforce Development.

A company spokesperson declined to specify what kinds of workers would be laid off but said the job cuts were part of a restructuring plan announced on May 9 by Takeda’s chief executive, Christophe Weber.

Takeda’s US headquarters is located in Cambridge and the company employed 6,290 workers in the state in 2023, according to the most recent “industry snapshot” of the Massachusetts Biotechnology Council.

That was far more than any other company in the state’s robust biopharma sector, reports Boston Globe.

Takeda is “committed to our presence in Massachusetts” and expects to remain the largest life sciences employer in the state, according to the spokesperson.

On May 9, Weber announced a restructuring plan after annual profits fell by more than half following the loss of patent protection of several major drugs.

The company estimated it would incur about $900 million in costs while it reorganized and trimmed its drug pipeline.

Weber said at the time that the firm needed “rigorous prioritization, efficiencies and organizational agility.”

Cost-cutting measures have included plans to close Takeda’s research site in San Diego.

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Other Economy News Today

Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.

First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.

Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.

That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.

The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.

US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.

Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.

Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.

“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”

“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.

The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.

While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”

Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”

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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia

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