The Danish maker of the weight-loss and diabetes drugs Wegovy and Ozempic is to cut 9,000 jobs as it issued a profit warning amid fierce competition from its US rival Eli Lilly.
Novo Nordisk’s decision to cut 11% of its global workforce of 78,400 take place as sales of Wegovy have slowed sharply as it has lost ground to Eli Lilly’s Mounjaro jabs, as well as cheaper versions made by generic drugmakers, and the pharmaceutical sector faces the threat of targeted US tariffs.
The Danish drugmaker, for which booming sales of GLP-1 diabetes and obesity drugs in recent years had turned it into Europe’s most valuable company, said that 5,000 of the job cuts will be in its home country.
Novo Nordisk’s market value has plunged by nearly $100bn after a previous profit warning in early August. Studies have shown that Eli Lilly’s Mounjaro is more effective than Wegovy in reducing weight. Both can be prescribed by NHS doctors to patients with high clinical need. Novo Nordisk’s Ozempic injection is also available on the NHS, as a treatment for type 2 diabetes.
Novo Nordisk estimates that the job cuts will save it 8bn kroner (£930m) a year by 2026.
However, they will cost 8bn kroner in one-off restructuring charges, prompting Novo Nordisk to cut its operating profit growth forecast for this year from 10%-16% to 4%-10%.
They are the first major move by Mike Doustdar, an Iranian-born Austrian-American businessman who took over as the chief executive last month from Lars Fruergaard Jørgensen, who had led the company since 2017 and hinted at potential layoffs last month.
“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 that we can be faster and more agile.”
Novo Nordisk has also been hit by disappointing results of its new obesity drug, CagriSema, which failed to outperform Eli Lilly’s Mounjaro in weight loss in a late-stage clinical trial.
Sales have also taken a hit from “compounding” in the US, where pharmacies make up weight-loss medications from ingredients, a practice that was allowed during drug shortages but was officially ended by the US regulator recently.
Jørgensen said last month that the generic, copycat market had “equal size to our business” and that compounded versions of Wegovy were sold at a “much lower price point”.
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Along with other European pharmaceutical firms, Novo Nordisk faces repeated threats from Donald Trump to impose sector-specific tariffs on imports from drugmakers who do not move some of their production to the US.
Susannah Streeter, a Hargreaves Lansdown analyst, said: “Novo Nordisk, which had grown fat on the spoils of its weight loss drugs, has been feeling the effects of rivals marching into the space. Uncertainty over American tariffs has also been a risk that continues to cast a shadow over the industry. By becoming a leaner machine, Novo hopes to redirect more funding to R&D to bolster its pipeline of products.”
Over the past five years, Novo Nordisk went on a hiring spree, raising employee numbers by 75%, as its performance soared because of the global popularity of its weight-loss drugs, which have to be injected once a week.
