Novo Nordisk to Cut 11% Workforce Amid Market Pressure

Novo Nordisk, a Danish pharmaceutical giant, has announced a significant restructuring plan in response to intense market competition and declining performance. The company revealed on September 10 that it will lay off 9,000 employees globally, affecting 11% of its workforce, including 5,000 employees in Denmark. This move is aimed at saving 8 billion Danish kroner (approximately 1.3 billion USD) by the end of 2026.

The restructuring comes as Novo Nordisk faces mounting pressure in the weight loss drug market. The company has lost its leading position in the key U.S. market to competitor Eli Lilly and Company. Additionally, generic versions of its drugs from U.S. compounding pharmacies pose a continuous threat, further eroding its market share and profitability. The company is now struggling to recover from a sharp decline in performance.

The aggressive measures are being led by the newly appointed CEO, who has called for stricter spending discipline and prudence. The CEO has already implemented initial steps such as freezing non-essential hiring and withdrawing job offers for new employees. The layoffs are described as a difficult but necessary decision for the company's future.

Novo Nordisk has also significantly lowered its financial guidance. The company now expects its full-year operating profit to grow by 4% to 10% on a fixed exchange rate basis, a stark contrast to the 27% growth forecast made in February. This is the third time the company has reduced its profit expectations this year.

The restructuring plan is part of a broader transformation initiative aimed at simplifying the organizational structure, speeding up decision-making, and reallocating resources to core growth areas such as diabetes and obesity. The company plans to communicate with affected employees over the next few months and implement additional measures to enhance its performance culture.