New highs for San Mateo County biotech layoffs

Vicki Brannock, senior director of workforce strategy and innovation at Biocom California, said while the layoffs are unfortunate, they were an expected response coming out of the COVID-19 peak in 2020 and 2021. 

“They had to staff in a certain way for the pandemic,” Brannock said. “There was a certain skill set needed for that. That’s why we anticipated that 2023 and 2024 would be a time for realignment, because those hard skills and competencies weren’t needed anymore. We’re not seeing anything super surprising to us.”

Biotechnology firms are not immune from downward-trending economic conditions, but the industry is often seen as a buttress against some of the volatility of the technology sector, especially in San Mateo County, which has a higher proportion of life science labor compared to its neighbors. While the latter conducted a high number of mass layoffs not only last year but during 2020 as well, life science firms scaled up operations across a variety of roles in many cases, including biomanufacturing and research and development. Such growth continued through 2021 as securing capital became easier, partially as a result of lowered interest rates that have since spiked beginning in 2022.  

While the life science sector continues hiring for engineering and scientific-focused roles, the human resources positions needed to accommodate growth during the pandemic were largely affected by last year’s cuts, said Marlena Sessions, executive director of Novaworks, a local, publicly-funded employment and job training agency. 

“We saw a lot at the administrative level and the HR level, because there had been incredible growth, and now they’re not needed as much. In the highly technical area is where we see fewer of those layoffs … this area is always looking for engineers and scientists,” Sessions said, noting additional training within artificial intelligence and machine learning remains in high demand. 

Brannock stated many manufacturing roles have also been affected since 2021, particularly as the demand for certain supplies such as testing kits diminished. While job cuts are likely to continue over the next few months, she is hopeful the trend won’t continue into the second half of the year.

“This next quarter, we’ll see a bit more of what we saw in 2023 but at least with some of the companies I’ve spoken to … we’re going to start to see things level by summertime and the fall. That is what they’re saying, and I think a lot of that will depend on access to funding,” she said.

Sessions said she is already noticing smaller biotechnology firms reaching out to Novaworks for talent acquisition services, as general economic conditions — in part triggered by the Federal Reserve’s probable rate cuts this year — signal a more promising funding climate this year. 

According to the state’s employment data, at least 300 employees are expected to experience layoffs this month in San Mateo County, with almost 70% of those coming from life science firms, including Talis Biomedical Corporation and Sangamo Therapeutics. Overall unemployment in the county mostly stayed the same between the third and fourth quarter last year, although fourth quarter figures in 2023 — as measured by initial unemployment claims — were about 14% higher than during the fourth quarter in 2022. 

alyse@smdailyjournal.com

(650) 344-5200 ext. 102