Amid growing competition in the weight-loss drug market, pharmaceutical company Novo Nordisk plans to cut approximately 9,000 jobs, about 11.5% of the entire workforce, including 5,000 positions in Denmark, its home country. These layoffs are part of a "transformation" aiming to streamline organization, prompt faster decision-making, and allocate resources more effectively to expand its diabetes and obesity medicine sectors.
CEO Mike Doustdar stated that the changes are necessary due to evolving markets, particularly in obesity treatments, which have become increasingly competitive and consumer-driven. Doustdar stated that Novo Nordisk must also undergo evolution, cultivating an enhanced performance-based culture, efficiently utilizing resources, and prioritizing investments in core therapy areas.
Novo Nordisk forecasts annualized savings of approximately 8 billion Danish Krone ($1.25 billion) by the end of 2026 due to these job cuts. However, the company foresees a restructuring cost of 8 billion Danish Krone for this year. The firm now projects its operating profit will rise 4% to 10%, a decrease from the previous forecast of 10% to 16%.
Shares of Novo Nordisk listed in the U.S. were up around 2% in recent trading. So far this year, shares have lost a third of their value as competitors like Eli Lilly have increased their market shares in diabetes and weight-loss therapies.