Danish pharmaceutical giant Novo Nordisk revealed plans to slash 11% of its workforce and lower its profit forecast for the year, as it faces intensifying competition from US rival Eli Lilly in the booming weight-loss drug market.
The company, best known for its diabetes treatments and recent blockbuster drugs Ozempic and Wegovy, said it will cut 9,000 jobs globally—5,000 of which are in Denmark—from a total workforce of 78,400. The restructuring is expected to save approximately DKr8 billion ($1.3 billion) annually by 2026, although it will incur DKr8 billion in restructuring costs this year. As a result, the company revised its operating profit growth forecast for 2025 from 10–16% down to 4–10%.
The announcement marks one of the first major strategic moves by newly appointed CEO Mike Doustdar, who took the helm in July following a steep decline in the company’s market value. Novo’s valuation had fallen by two-thirds after a disappointing drug trial, slowing growth, and profit warnings.
“It is always difficult to see talented and valued colleagues go, but we are convinced that this is the right thing to do for the long-term success of Novo Nordisk. We need a shift in our mindset and approach so we can be faster and more agile,” Doustdar said in a statement.
The job cuts follow a period of rapid expansion. Over the past five years, Novo increased its workforce by nearly 75% as it capitalized on the popularity of its obesity treatments, which gained traction on social media and among celebrities. However, with the weight-loss drug market becoming increasingly competitive and consumer-driven, the company now faces pressure to adapt.
Doustdar emphasized the need to “evolve” the company’s structure and culture to prioritize high-impact investments and boost performance. “This means instilling an increased performance-based culture, deploying our resources ever more effectively, and prioritizing investment where it will have the most impact—behind our leading therapy areas,” he added.
Shares of Novo Nordisk rose 1.3% to DKr343 on Wednesday morning following the announcement.
Analysts believe the cuts are a necessary step. Søren Løntoft Hansen of Sydbank noted that the company’s shift from hypergrowth to slower, more sustainable growth required simplifying its organization. “They are doing this to reduce complexity in the organization that has come with this growth,” Hansen said.
Despite the business rationale, the cuts are expected to stir concern in Denmark, where Novo Nordisk plays a central role in the economy. Some investors and analysts have cautioned that cost reductions should be carefully managed to ensure the company can still invest in marketing efforts and research and development. Grégoire Biollaz, a senior investment manager at Pictet, questioned whether a cost-cutting approach was necessary, arguing that “it has to be rational and well explained.”
Novo’s struggles in the US market, where Eli Lilly’s weight-loss drugs are steadily eroding its market share, further underscore the urgency of the restructuring. The coming months will be critical as the company navigates an increasingly crowded and consumer-driven pharmaceutical landscape.
