Recursion Pharmaceuticals Stock Surges After Company Lays Off 20% Workforce: Retail Predicts ‘Blue Skies’ Ahead

Recursion Pharmaceuticals, Inc. (RXRX) on Tuesday said it will reduce its workforce by approximately 20% as it seeks to increase the use of artificial intelligence tools amid ongoing “friction” in biotech capital markets.

The biotechnology company has approximately 800 employees, indicating that the layoffs will affect around 160 individuals. Shares of the company are up by about 11% in morning trade.

The company estimates that it will incur approximately $11 million in charges in connection with the workforce reduction, consisting of severance payments, employee benefits, and related costs, substantially all of which is expected to be incurred in the year ending Dec. 31, 2025.

The company now expects its projected cash runway to extend into the fourth quarter of 2027. In early May, Recursion had projected a cash runway into mid-2027.

The company expects its cash burn, excluding partnership inflows or one-time severance costs, to be less than $450 million in 2025 and less than $390 million in 2026.

For the quarter ending June 30, the company expects cash, cash equivalents, and restricted cash to be above $500 million compared to $509 million as of the quarter ending March 31, 2025.

The company also said that it has the potential to receive over $100 million in cash inflows from progress-based milestone payments from partners by the end of 2026.

CEO Chris Gibson pegged the reduction in workforce to “the maturation of AI tools and ongoing friction in biotech capital markets.” A few of the AI tools were also built in-house, he said.

On Stocktwits, retail sentiment around Recursion stayed unmoved in the ‘extremely bullish’ territory over the past 24 hours while message volume stayed at ‘extremely high’ levels.

A Stocktwits user believes the company will achieve profitability sooner.

Another user highlighted the positives of the workforce reduction.

RXRX stock is down by about 17% this year and about 31% over the past 12 months.

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