Danish pharmaceutical giant Novo Nordisk has announced a significant restructuring plan, which includes cutting 11% of its global workforce. The company, known for its anti-obesity treatments Ozempic and Wegovy, will slash 9,000 jobs worldwide, with 5,000 of those cuts occurring in Denmark. This move is expected to save the company approximately $1.3 billion.
The job cuts are part of a broader effort to simplify the company’s organization, improve decision-making, and reallocate resources to focus on growth opportunities in diabetes and obesity. Novo Nordisk’s success in these areas had previously driven significant growth, with the company’s workforce expanding from 43,700 in 2020 to 78,400 today. However, the company’s share price has been declining since last year due to increasing competition in the US market, particularly from rival treatments made by Eli Lilly.
Novo Nordisk’s CEO, Mike Doustdar, noted that the company must adapt to evolving markets, particularly in obesity, which has become more competitive and consumer-driven. The company’s “transformation” plan aims to meet rising global demand while competing in a more dynamic market. Despite the challenges, the company’s share price surged by over 3% following the announcement, indicating investor approval of the restructuring plan.
The job cuts will have a significant impact on the Danish economy, with the 5,000 domestic job losses equivalent to approximately two months of job growth. Palle Sorensen, chief economist at Nykredit bank, described the cuts as “significant.” The company’s limited production capacity has also led to the temporary authorization of “compound” or copycat versions of Ozempic and Wegovy, which has further increased competition.
Novo Nordisk’s treatments, including Ozempic and Wegovy, use analogues of the hormone GLP-1 to regulate blood glucose levels and appetite. While the company has faced challenges, its commitment to meeting rising global demand and competing in a dynamic market remains a key focus. The restructuring plan is expected to have a significant impact on the company’s future growth and competitiveness in the pharmaceutical industry.