Danish GLP-1 giant Novo Nordisk announced a restructuring effort today that will cut 9,000 jobs, a little over 11% of its global workforce. The cut comes a little over a month after the start of new CEO Mike Doustdar’s tenure.
“As the global leader in obesity and diabetes, Novo Nordisk delivers life-changing products for patients worldwide,” Doustdar said in a statement. “But our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well. This means instilling an increased performance-based culture, deploying our resources ever more effectively, and prioritising investment where it will have the most impact – behind our leading therapy areas.”
The company will cut around 5,000 jobs in Denmark and 4,000 elsewhere in the world as part of a restructuring aimed at simplifying the organisation and redirecting resources toward growth opportunities in diabetes and obesity. Cuts will include both staff and management.
“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,” Doustdar said. “We need a shift in our mindset and approach so we can be faster and more agile. Our transformation plan is designed to deliver this. By realigning our resources now, we will be able to prioritise investments to drive sustainable growth and future innovation for the millions of patients with chronic diseases globally, particularly in diabetes and obesity.”
The company anticipates that the restructuring will incur $1.3 billion in short-term costs but ultimately deliver the same amount in annualised savings by the end of 2026. The company updated its earnings projections for this year from 10 to 16% operating profit growth down to 4 to 10% as a result of the changes.
While obesity drugs continue to be a hot market, Novo Nordisk has struggled to maintain its leadership in that market, facing growing competition from Eli Lilly as well as from questionably legal drug compounders and grey market providers.
But major reductions in force are not unique to the obesity sector these days. In the last two months, major staff cuts have been announced at Moderna, Bayer, and MSD as well as Iovance, CSL, and Lundbeck, many of them in the neighbourhood of 10% of their workforce.
While each situation is unique, together they underscore how pharma companies are facing a high amount of uncertainty around the potential economic effects of President Trump’s Most Favoured Nations drug pricing scheme and unprecedented tariffs, HHS Secretary Robert F Kennedy Jr.’s open animosity toward the industry, and more traditional challenges like pending patent expirations.
