Ozempic-maker Novo Nordisk to cut 9,000 jobs as profits plummet
What's the story
Novo Nordisk, the Danish pharmaceutical giant and maker of popular diabetes drug Ozempic, has announced plans to lay off 9,000 employees globally. The move comes as part of a major restructuring effort aimed at saving $1.3 billion annually. The company also downgraded its profit forecast for the third time this year amid a sharp decline in performance.
Impact
Job cuts to affect Denmark the most
The job cuts will affect around 11% of Novo Nordisk's global workforce, with Denmark bearing the brunt of the layoffs with 5,000 reductions. The company said it plans to communicate with affected employees over the next few months. Novo Nordisk had previously projected a profit growth of up to 27% but has now revised its expectations, forecasting an operating profit growth between 4% and 10% at constant exchange rates.
Strategic shift
Novo Nordisk's transformation plan
The job cuts are part of a larger transformation plan by Novo Nordisk to simplify its organization, speed up decision-making, and redirect resources toward growth opportunities in diabetes and obesity. The company's new CEO Mike Doustdar had already imposed a hiring freeze for non-critical roles and rescinded job offers for incoming employees who hadn't started yet.
Market reaction
Wegovy's sales decline hits Novo Nordisk hard
Novo Nordisk's shares have fallen nearly 46% since the start of the year, wiping $70 billion off its market value. The company became Europe's most valuable listed firm worth $650 billion last year on booming sales of weight-loss drug Wegovy. However, it has warned of slower growth this year due to competition from cheaper copycat versions of its drugs in the US and other factors.