Novo Nordisk, the maker of blockbuster weight loss medication Wegovy, will cut 9,000 jobs amid growing competition in the industry led by US rival Eli Lilly.
The Danish pharmaceutical giant announced the cuts on Wednesday, marking the largest layoff in Denmark’s history. The restructuring is slated to save the company 8 billion Danish crowns ($1.25bn) annually.
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This comes amid changes in the company’s C-suite. Last month, Novo named Maziar Mike Doustdar as CEO to replace Lars Fruergaard Jorgensen.
Once Europe’s most valuable company by market capitalisation, Novo has seen its market cap fall to roughly $181bn from its peak last year of $650bn. At the time, Novo’s market cap exceeded Denmark’s annual gross domestic product.
On Wednesday, the company issued its third profit warning this year.
“They need to reignite investor confidence with an appealing growth story for the future,” said Novo Nordisk shareholder Lukas Leu, a portfolio manager at ATG Healthcare, to the Reuters news agency.
“The obesity market was misjudged. It’s much more consumer-driven than anticipated, and Novo expanded organisational complexity too quickly.”
Rise and fall
The Danish pharma giant’s surge in growth began in 2021, when Wegovy was the first highly effective obesity drug to be approved in the United States. Novo Nordisk nearly doubled its headcount over the last five years amid its then surge in growth, which drove it to become Europe’s most valuable company — a title it has gone back and forth with over the last year with the owner of Moet Hennessy and Louis Vuitton, LVMH.
The company, which is based in Bagsvaerd just outside Copenhagen, has 78,400 workers. Last month, it announced a hiring freeze on non-essential roles. The new cuts will account for 11.5 percent of the company’s total workforce, with at least 5,000 cuts from the workforce in Denmark. Novo Nordisk declined to specify which business units would be impacted.
In July, Novo lost $70bn in market value as it warned of a hit in profits amidst increased competition in a market it once dominated.
Bank of America analysts said they now expect Novo to issue a fourth profit warning when it reports third-quarter results in November, doubting the company can meet the top end of its sales guidance.
Novo is slimming down while also trying to boost output to meet rising demand for its products and readying the pill version of Wegovy as well as exploring the additional health benefits of its glucagon-like peptide-1 (GLP-1) portfolio.
In the fourth quarter, it expects to save at least one billion Danish crowns ($157m), which it plans to redirect into research and development, manufacturing expansion, and improving global patient access.
“We need to have the best-in-class launches, especially as competition is increasing,” Doustdar said in a call with reporters. “We want to make sure we don’t have to spare a dime.”
“This is the new CEO’s first major move to simplify Novo’s structure and redirect resources toward growth in diabetes and obesity,” said Michael Novod, head of equity research for Denmark at Nordea Bank.
Increased competition
Novo Nordisk has faced challenges as sales of Wegovy and diabetes treatment medication Ozempic begin to lose momentum, particularly in the United States.
Eli Lilly’s Zepbound overtook Wegovy in weekly prescriptions in the US earlier this year, although Wegovy prescriptions began to increase at a faster pace over the summer, narrowing Lilly’s lead in the critical market.
Novo’s stock has lost value on the increase in competition. Shares have fallen nearly 46 percent since the start of the year. For the day, the stock is in positive territory, up by 0.4 percent as of 11:45am in New York (15:45 GMT).
https://www.aljazeera.com/economy/2025/9/10/wegovy-maker-novo-nordisk-to-slash-thousands-of-jobs?traffic_source=rss
