Novo Nordisk, the company behind Wegovy, has announced a significant restructuring that will eliminate 9,000 jobs, which represents about 11.5% of its workforce, with the goal of saving $1.26 billion annually.
According to a statement, “Novo Nordisk today revealed a company-wide transformation aimed at simplifying structures, accelerating decision-making, and reallocating resources to boost growth in diabetes and obesity initiatives.”
Known also for its Ozempic diabetes treatment, Novo Nordisk mentioned that a global employment freeze was put into effect in August for positions deemed non-essential to the business.
With approximately 78,400 positions worldwide, the company has around 5,000 job openings in Denmark.
“The obesity market is changing; it’s becoming more competitive and consumer-oriented. We need to adapt,” said newly appointed CEO Mike Dustdal.
“This involves fostering a performance-based culture, optimizing resource use, and prioritizing investments in key therapeutic areas,” he added.
As part of this restructuring, Novo Nordisk will report a one-time restructuring cost of $1.4 billion in the third quarter, which includes impairment charges. However, it anticipates savings of $156.9 million in the fourth quarter.
Operating profits are projected to grow between 4% and 10% this year, although this figure was previously expected to be between 10% and 16%. Changes in expectations are largely due to the costs associated with the restructuring.
Last year, Novo emerged as Europe’s most valuable publicly listed company, largely attributed to Wegovy. However, it’s facing a critical period, particularly in the U.S., where it is starting to lose market share and see slower sales growth.
This year has been marked by warnings of much slower growth due to the expiration of manufacturing exclusivity for mimetics that share ingredients with Wegovy.
In July, investors reacted significantly, erasing $70 billion from the drug maker’s market value after Novo issued a profit warning and appointed its longtime veteran Doustar as the new CEO.
Sparking concern, the stock price has plummeted nearly 46% since the beginning of the year, lowering its market value to about $181 billion as of Tuesday’s close.
