KPMG: 94% of Life Sciences CEOs to Expand Workforce Over the Next 3 Years

In recent years, the biopharma industry has frequently made headlines for layoffs as companies, both large and small, implemented cost-cutting measures and restructuring plans. Over the past 10 days alone, reports have emerged of workforce reductions at major firms, including Bristol Myers Squibb, Novartis, Lexicon Pharmaceuticals, Johnson & Johnson, Gilead Sciences, Merck, Sonata Therapeutics, Medigene, and Alector Therapeutics. However, according to industry leaders surveyed by KPMG, this trend may be nearing its end.

In the annual survey, 94% of life sciences CEOs indicated plans to expand their workforce over the next three years. Among these, 37% predicted their companies would increase headcount by at least 6%. This outlook reflects the confidence many CEOs have in their growth potential. Notably, 79% of life sciences CEOs expressed confidence that their companies were on a growth trajectory for the next three years, a 10% increase from last year’s survey.

The findings were outlined in KPMG’s 2024 Life Sciences CEO Outlook report, which presents an optimistic view of the industry’s future.

Survey Insights

KPMG’s broader 2024 CEO Outlook surveyed 1,325 CEOs from 11 industries and key global markets, focusing on companies with revenues of at least $500 million. A third of these companies reported revenues exceeding $10 billion. Within the life sciences sector, 120 CEOs participated, with 45% representing pharmaceutical companies and 19% representing biotech firms.

While CEOs were optimistic about their own companies, their confidence in the overall health of the life sciences industry declined. This year, 67% of respondents expressed confidence in the sector’s broader outlook, down from 80% in 2022.

Key Concerns

Economic uncertainty and geopolitical complexities were cited as significant challenges, with 57% and 53% of CEOs identifying these factors as primary concerns, respectively. About two-thirds of the respondents noted that they had adjusted their growth strategies to align with the shifting market landscape.

Another focal point for CEOs was the integration of generative artificial intelligence (gen AI). Sixty percent of respondents named gen AI as their top investment priority, and 77% anticipated realizing returns on these investments within the next five years. The technology’s potential to revolutionize research and development, as well as improve operational efficiency, has made it an attractive area of focus.

Despite this enthusiasm, only 38% of CEOs believed their data infrastructure was adequately prepared for AI adoption. Furthermore, just 37% felt confident that their workforce possessed the necessary skills to effectively implement AI technologies.

ESG and Sustainability

The report also emphasized the growing importance of environmental, social, and governance (ESG) goals within the life sciences sector. According to 38% of respondents, achieving ESG targets is crucial for strengthening customer relationships and fostering positive brand associations.

Jon Haynes, KPMG’s EMA region lead in life sciences, highlighted the sector’s commitment to sustainability. He noted that several European-based pharmaceutical companies are leading ESG initiatives, underscoring the industry’s dedication to sustainable practices.

The 2024 Life Sciences CEO Outlook reveals a sector poised for growth, driven by technological innovation and a commitment to sustainability, even as it navigates economic and geopolitical uncertainties.

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