Novo Nordisk A/S, which makes the viral weight-loss drug Wegovy, is set to cut 9,000 jobs or 11 per cent of its workforce, it said on Wednesday.
The Novo Nordisk layoffs come as the company struggles to compete with US rival Eli Lilly and other compounded similar drugs.
The Danish pharmaceutical giant, which is looking to revive growth, used to be Europe’s most valuable company listed on markets.
Novo Nordisk said that the new restructuring plan would save 8 billion Danish crowns ($1.25 billion) annually. The Novo Nordisk job cuts are part of a “company-wide transformation to simplify its organisation, improve the speed of decision-making, and reallocate resources towards the company’s growth opportunities in diabetes and obesity,” it said.
The company however lowered its earnings forecast for the third time this year. The Wegovy maker now says it expects its operating profit growth to be between 4 and 10 per cent, down from 19-27 per cent range in the beginning of the year.
The Novo Nordisk layoffs will affect 5,000 workers in Denmark alone.
Novo Nordisk CEO Mike Doustdar, who assumed leadership last month, said the overhaul would simplify operations, accelerate decision-making and redirect resources toward growth areas.
“Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well,” he said in a statement.
“This means instilling an increased performance-based culture, deploying our resources ever more effectively, and prioritising investment where it will have the most impact – behind our leading therapy areas,” the CEO added.
Novo Nordisk went on a hiring spree at the time when its popularity made it a darling among investors, shooting up its company value. It increased its workforce from 43,700 in 2020 to 78,400 today. Its success was even credited for boosting the growth of Denmark as a nation in 2023.
The copycat crisis
Novo Nordisk faces stiff competition from rival treatments made by US group Eli Lilly.
The Danish company’s limited production capacity had also led the US Food and Drug Administration to temporarily allow pharmacies to create so-called “compound” or copycat versions of Ozempic and Wegovy.
The authorisation expired on May 22 but Novo Nordisk said last month that sales of generic versions of its treatments were continuing “under the false guise of ‘personalisation'”.
Ozempic is an injectable anti-diabetic treatment that became popular on social media for its slimming properties.
Wegovy, which has the same active ingredient as Ozempic in a different dose, is a weight-loss drug.