Ozempic maker Novo Nordisk to lay off 9,000 workers in major restructuring

Danish pharmaceutical giant Novo Nordisk announced Wednesday it will cut 9,000 jobs globally, including 5,000 in Denmark, in a sweeping restructuring plan aimed at streamlining operations and refocusing on its core growth areas of diabetes and obesity treatment. 

The layoffs, one of the largest in Denmark's history, are part of a broader "company-wide transformation" meant to save 8 billion Danish kroner ($1.25 billion) annually, the company said in a statement. 

"Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well," Novo Nordisk CEO Mike Doustdar said.

The move comes as Novo, known for its highly popular weight-loss drugs Ozempic and Wegovy, has been struggling to regain its market footing. It recently lost its lead in the diabetes and obesity treatment market to its US rival Eli Lilly, which released a similar drug called Mounjaro in 2022. Additionally, the U.S. Food and Drug Administration's temporary approval for pharmacies to produce generic versions of Ozempic and Wegovy, which expired in late May, further eroded the company’s market share.

These challenges have been reflected in the company's recent financial performance. Sales growth has been sluggish since mid-2024, wiping out an estimated $450 billion from Novo's market capitalization. On Wednesday, the company issued its third profit warning of the year, citing 9 billion kroner ($905 million) in expenses related to the overhaul. Analysts predict another warning could follow the release of third-quarter results in November.

The company's stock has taken a significant hit, falling nearly 46% since the beginning of the year and bringing its market capitalization to approximately $181 billion, a stark contrast to its peak of $650 billion last year. The second profit warning made in July, which also coincided with the naming of Mike Doustdar as the new CEO, caused a single-day loss of around $70 billion in market value.

"The obesity market was misjudged. It's much more consumer-driven than anticipated, and Novo expanded organisational complexity too quickly." Lukas Leu, a Novo Nordisk shareholder, told Reuters.

Despite the news, the company’s share price rose by more than 3% in midday trading in Copenhagen, signaling investor confidence that the restructuring plan could successfully return the company to profitability and market leadership.

Denmark’s Finance Minister Nicolai Wammen sought to reassure the public that Novo Nordisk's mass layoffs and market performance would not sour the country's economic outlook. 

"The Danish economy is extremely strong, and we have the highest employment ever in Denmark, very low unemployment, and very little debt. We have had a surplus on the public finances for nine years in a row," Wammen told Reuters.