Wegovy-maker Novo Nordisk cutting 9000 jobs in restructuring
Novo Nordisk, the maker of Wegovy, announced a significant restructuring plan that will result in 9,000 job cuts, representing about 11.5% of its workforce. This move is aimed at saving $1.26 billion annually and comes as the company faces increasing competition from US rival Eli Lilly.
“Novo Nordisk today announced a company-wide transformation to simplify its organization, improve decision-making speed, and focus resources on growth opportunities in diabetes and obesity,” the company stated.
The company, known for its Ozempic diabetes treatment, had already implemented a global hiring freeze in August for non-critical roles. Approximately 5,000 of the job cuts will be in Denmark, out of the current 78,400 positions globally.
Newly appointed CEO Mike Doustdar emphasized the need for the company to evolve in response to evolving markets and increased competition in obesity, emphasizing the importance of a performance-based culture and strategic resource allocation.
As part of the restructuring, Novo Nordisk expects one-off costs of $1.4 billion in the third quarter, including impairment charges, but anticipates savings of $156.9 million in the fourth quarter. The company also revised its operating profit growth forecast for the year to between 4% and 10% due to restructuring costs.
Novo Nordisk, once Europe’s most valuable listed company, is facing challenges as sales growth slows, particularly in the US. Market share loss and competition from copycat medicines have contributed to the company’s slower growth projections.
Investors reacted to Novo’s profit warning and leadership change by reducing the drugmaker’s market value by $70 billion in July. The company’s shares have fallen by nearly 46% since the beginning of the year, bringing its market value to around $181 billion.
