Novo Nordisk, the pharmaceutical giant known for its weight-loss and diabetes drugs Wegovy and Ozempic, has announced a significant restructuring that will result in approximately 9,000 job cuts globally, representing about 11% of its total workforce of 78,400. This move, initiated by new CEO Mike Doustdar, aims to save around 8 billion Danish kroner (approximately $1.3 billion) annually by the end of 2026. Roughly 5,000 of these job reductions will occur in Denmark, the company's home country.
The restructuring is a response to intense competition, particularly from Eli Lilly's Mounjaro jabs, and a slowdown in sales of its blockbuster injection, Wegovy. The company is also facing pressure from cheaper generic versions of its drugs and the potential threat of targeted US tariffs on the pharmaceutical sector. This transformation seeks to streamline the organization, accelerate decision-making, and reallocate resources towards key growth areas like diabetes and obesity, including commercial initiatives and research and development programs.
The job cuts are expected to lead to a one-off restructuring cost of approximately 8 billion Danish kroner ($1.3 billion), which includes impairment charges. This cost will negatively impact the company's full-year 2025 operating profit growth outlook by about 6 percentage points at constant exchange rates. Despite the immediate financial hit, investors reacted positively to the news, with the company's share price rising by 2.1%, encouraged by the anticipated long-term cost savings.
The implementation of the workforce reduction will begin immediately, with affected employees expected to be notified over the next few months, pending negotiations in accordance with local labor laws. The layoffs will span various departments, including staff areas, headquarters functions, research, manufacturing, IT, and quality control. Employees in Denmark who have been laid off have reportedly formed a group dubbed the "Club 5,000."
