Danish pharmaceutical giant Novo Nordisk announced a significant restructuring plan on Wednesday, including the elimination of 11% of its global workforce, equating to approximately 9,000 jobs, with 5,000 of those located in Denmark. This strategic overhaul, which aims to generate 8 billion kroner ($1.3 billion) in savings by the end of 2026, comes as the company faces mounting competition in the lucrative anti-obesity drug market.

The company, renowned for its diabetes and weight-loss treatments Ozempic and Wegovy, stated that the job cuts are an integral part of a “company-wide transformation to simplify its organisation, improve the speed of decision-making, and reallocate resources towards the company's growth opportunities in diabetes and obesity.” This strategic pivot is a direct response to an evolving market landscape, which has become notably more competitive and consumer-driven, particularly in the obesity sector.

Amidst these changes, Novo Nordisk also lowered its earnings forecast for the third time this year. Operating profit growth is now anticipated to be between 4% and 10%, a notable decrease from an earlier estimate of a 19-27% range at the beginning of the year. This financial adjustment reflects the slowdown in sales, particularly in the United States, where the company faces intensified competition from rival Eli Lilly & Co. Novo Nordisk Chief Executive Mike Doustdar, who succeeded Lars Fruergaard Jorgensen in August, emphasized the need for the company to evolve, stating, “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 experienced rapid growth, expanding its workforce from 43,700 in 2020 to 78,400, propelled by the success of its weight-loss injections, which at one point made it Europe's most valuable company. However, since last year, its share price has declined, mirroring the slowdown in sales. Beyond direct competition, Novo Nordisk has also grappled with production capacity challenges. The US Food and Drug Administration (FDA) had temporarily allowed pharmacies to produce “compounded” or copycat versions of Ozempic and Wegovy to meet demand. Although Novo Nordisk's authorization for these compounded versions expired on May 22, reports indicate that generic versions of its treatments have continued to be sold under the guise of “personalisation.”

Ozempic is an injectable treatment for type 2 diabetes that gained widespread popularity on social media for its slimming properties, while Wegovy contains the same active ingredient, semaglutide, in a different dose and is specifically approved for obesity treatment. Novo Nordisk’s “transformation” plan underscores its commitment to meeting rising global demand while concurrently navigating and competing effectively within a more dynamic and consumer-driven obesity market.