Novo Nordisk, the Danish pharmaceutical company behind the popular weight-loss drug Ozempic, has announced major job cuts. On Wednesday, the company said it will lay off 9,000 workers worldwide, about 11 percent of its global staff.
The cuts will include 5,000 jobs in Denmark. Novo Nordisk expects to save around 8 billion kroner ($1.3 billion) through this restructuring plan.
Why the Cuts Are Happening
The company explained that the layoffs are part of a “transformation plan.” This plan aims to:
- Simplify the company’s organization
- Speed up decision-making
- Reallocate resources to growth areas such as diabetes and obesity care
Novo Nordisk has lowered its earnings forecast three times this year. It now expects operating profit growth of between 4 and 10 percent, down from its earlier forecast of 10 to 16 percent.
Competition Is Growing
For years, Novo Nordisk enjoyed booming sales of Ozempic and Wegovy, making it one of Europe’s most valuable companies. Its workforce also grew rapidly, from 43,700 employees in 2020 to 78,400 today.
But the market has changed. U.S. drugmaker Eli Lilly has launched rival treatments, and competition in the obesity drug market is heating up.
Novo Nordisk also struggled with limited production capacity. At one point, U.S. regulators even allowed pharmacies to create “copycat” versions of Ozempic and Wegovy. Although that authorization ended in May, the company says generic versions are still being sold.
What the CEO Says
Chief Executive Mike Doustdar, who took over in August, said the company must adapt.
“Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well,” he said.
He added that Novo Nordisk will focus on building a performance-based culture and investing in areas that drive the most impact.
Looking Ahead
Novo Nordisk still believes demand for weight-loss and diabetes treatments will remain strong. However, the restructuring shows that even industry leaders must adjust when markets shift.
The company hopes leaner operations and sharper focus will keep it competitive in the rapidly growing — and now crowded obesity drug market.
