Novo Nordisk, the Danish pharmaceutical giant behind the renowned weight loss drug, Ozempic, has shaken the entire pharmaceutical industry with a major announcement.
The company announced its global restructuring plan to lay off about 9,000 employees, nearly 11% of its workforce amid increasing competition in the weight-loss drug market.
The significant move comes as competitors such as Eli Lilly, another popular pharmaceutical company, brought compounded and cheaper alternatives.
Nearly half of the job cuts will be in Denmark. The company expects to save $1.25 billion annually by the last quarter of 2026.
Novo Nordisk president and CEO, Mike Doustdar, stated, “Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well.”
According to some credible analysts, the company whose growth skyrocketed in recent years for its weight-loss drugs, is now experiencing immense pressure from rivals and concerns over US tariffs.
Susannah Streeter of Hargreaves Lansdown stated, “By becoming leaner, Novo hopes to redirect more funding to R&D to strengthen its pipeline.”
The major step marks a reversal following the company’s workforce growth of up to 75% in five years.
Novo Nordisk expects to incur $1.25 billion in one-off restructuring costs, mostly in Q3, and reduced its 2025 profit growth forecast from 10-16% to 4-10%.
It is important to note that Novo Nordisk’s stock surged to 3% in Denmark and 1.7% in US pre-market trading.