Danish pharmaceutical giant Novo Nordisk, known for its weight-loss and diabetes drugs Wegovy and Ozempic, has announced plans to cut 9,000 jobs, representing 11% of its global workforce. The move comes as the company faces intense competition from US rival Eli Lilly and a slowdown in sales of its blockbuster injection Wegovy.
New chief executive Mike Doustdar, who took over last month, said the job cuts are necessary to make the company 'faster and more agile'. Of the 9,000 redundancies, 5,000 will be in Novo Nordisk's home country of Denmark. The company estimates the cuts will save 8 billion Danish kroner (£930 million) annually by 2026, but will incur one-off restructuring costs of the same amount, prompting a reduction in its 2025 operating profit growth forecast from 10%-16% to 4%-10%.
Novo Nordisk's sales have been hit by competition from Eli Lilly's Mounjaro jabs, which studies have shown to be more effective for weight loss than Wegovy. Additionally, cheaper generic versions and compounded drugs in the US have eroded market share. The company also suffered a setback with its new obesity drug CagriSema, which failed to outperform Mounjaro in a late-stage trial.
The pharmaceutical sector faces further uncertainty from the threat of US tariffs under former President Donald Trump. Susannah Streeter, an analyst at Hargreaves Lansdown, commented: 'Novo Nordisk, which had grown fat on the spoils of its weight loss drugs, has been feeling the effects of rivals marching into the space.'
Novo Nordisk's share price rose 2.1% on the day of the announcement, as investors welcomed the cost-saving measures. The company had previously been Europe's most valuable company but lost that title in March.
