Despite Layoffs, Life Sciences' Dwindling Talent Pool Adds To Industry Woes

Life sciences companies have engaged in record swaths of layoffs in the last three months. 

The cuts hit a talent pool stretched to the brink, with employment levels for research and development jobs reaching record levels to end 2024 and start 2025. Even with the layoffs, the unemployment rate for biotech in April was just 2.8%, according to the Bureau of Labor Statistics. 

The tenuous employment picture poses yet another problem for life sciences companies and their landlords, which are working to wrangle a 21.4% vacancy rate nationwide that more than doubles in some of the country’s top lab markets.

“You need power, you need water, you need space, but those are things you can get,” said Laura Rowley, North Carolina Biotechnology Center vice president of life sciences economic development. “What you can’t do overnight is snap your fingers and build a whole continuum of job training.”

The number of workers needed to fill that vacant space could be substantial. Colliers Executive Vice President Joe Fetterman estimated 4K SF of lab space could comfortably house 10 researchers and their equipment. More cutting-edge work would require less space, and artificial intelligence drug discovery and modeling would need roughly one-third of that space, about 150 SF per worker. 

Signs of both a growth in demand and a slowdown in supply are emerging. Employment of biological technicians is projected to grow 7% annually, according to the Bureau of Labor Statistics, with roughly 10,000 openings a year.

According to the latest figures from MassBio, Massachusetts' biotech industry association, the state’s workforce growth has slowed, only growing 2.5% in 2023, after two earlier years of 7.8% annual growth. 

The association predicts the state will need 38,000 net new jobs by 2033. Aon reported that just 11% of biotech companies are planning or recruiting for workforce growth, down from 44% in the first half of 2022. Newmark’s latest life sciences report found that “macroeconomic headwinds” may also create additional labor market challenges in the near term. 

This recruitment challenge could become more complicated due to recent federal changes to funding for science, research and training, according to Joanna Mikulski, a strategist and former Biden White House senior adviser for labor and tech policy. 

Recent cuts to science, technology, engineering and mathematics funding and education present hurdles, including reducing funding for the National Science Foundation. There are also cuts to the Workforce Innovation and Opportunity Act in the proposed federal budget from the White House.

“It adds a lot of uncertainty in terms of, where is the investment going to come from to really supercharge these talent pathways?” Mikulski said. “How are state and local leaders really stepping up, given the uncertainty at the federal level?”

Biotech employment boomed a few years ago in parallel with the growth in lab real estate and development. The coronavirus created significant investments in vaccines, diagnostics, mRNA applications and the requisite workforce.

Capital investment surged between 2019 and 2021, and innovations in cell and gene therapies have created growth and excitement in new fields of medical research. 

More programs are needed to train talent, especially in biomanufacturing, computational technology and regulatory positions to accommodate the need for more staff, Fetterman said. New announcements of coming factories and plants in Ohio, Indiana and North Carolina might bring in roughly 5,000 jobs. 

“When you're buying land for a facility, you've got a couple of years of construction, and that's when you start the training partnerships, because it takes them awhile to ramp up and to generate the talent,” said Matt Gardner, head of CBRE’s life sciences advisory practice.

Mikulski said there is momentum on the state and local levels, especially in states like Massachusetts and North Carolina that are biotech hubs, to fund new workforce programs. 

Many experts point to North Carolina, which has built a burgeoning biomanufacturing industry around the Research Triangle in recent decades, as a model for workforce development in the industry. According to NCBiotech's Rowley, the work of industry groups like hers and local government to proactively build additional programming and talent development initiatives is a key factor in regional growth. 

The state is home to 840 life sciences companies, including more than 100 manufacturing plants, all directly employing 75,000 people. This May, Genentech announced a $700M plant coming to Wake County that will employ 400.

Rowley said there is a series of job development programs that look at the entire ecosystem of employment. North Carolina’s continuum of training includes an apprenticeship program, the Career and College Promise Program that lets high school students take college courses at no cost, and a program that trains community college students for biotech careers. 

“Essentially, it’s getting out in your community and addressing the fact that probably most of them haven't thought about the fact that the medicines they take every day are made somewhere, and a lot of times they may actually be made right in their backyard,” Rowley said.

Rowley has seen significant growth and investment in manufacturing opportunities in the state. But there have been layoffs and hiring freezes at universities and funding concerns with some smaller venture-backed companies, which use local contract research organizations.

“If they don't have money, then the contract research organizations aren't getting the same level of business that they would normally enjoy,” she said.