Novo Nordisk to Cut 9,000 Jobs Amid Intensified Competition

COPENHAGEN, Denmark, Sept 10 (Reuters) – Danish pharmaceutical company Novo Nordisk announced on Wednesday it will cut approximately 9,000 jobs, or about 11.5% of its workforce, in a plan to save 8 billion Danish crowns (approximately $1.26 billion) annually.

This restructuring plan comes as Novo Nordisk faces increasing competition from U.S. rival Eli Lilly. The company is well-known for its Wegovy and Ozempic weight loss and diabetes treatments. In a statement, Novo Nordisk said the transformation aims to simplify its organization and improve decision-making speed while reallocating resources to enhance growth in diabetes and obesity.

The job cuts will affect about 5,000 positions in Denmark, where the company is headquartered. Current CEO Mike Doustdar emphasized the need for the company to adapt to evolving market conditions. ‘Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well,’ he stated.

As part of this restructuring, Novo Nordisk is expecting to report one-off costs of 9 billion Danish crowns in the third quarter, which includes impairment charges. However, the company anticipates savings of 1 billion crowns in the fourth quarter.

Additionally, Novo Nordisk has lowered its full-year operating profit growth expectations to between 4% and 10%, down from the previous forecast of 10% to 16%. This adjustment is solely due to the anticipated impacts of the restructuring.

Last year, Novo Nordisk’s value soared to $650 billion on the back of booming sales of Wegovy, but as sales growth has slowed, especially in the U.S., the company is clearly at a critical juncture. The firm has recently issued profit warnings, resulting in a $70 billion drop in market value. Shares of Novo Nordisk have plummeted nearly 46% since the beginning of the year, bringing its current market value to around $181 billion.

The situation is further complicated by the emergence of competitors producing similar medications based on the same ingredients as Wegovy, exacerbating market challenges.