Novo Nordisk Announces Major Restructuring, 9,000 Layoffs Amid Changing Obesity Market Landscape

Novo Nordisk, the Danish pharmaceutical giant, has unveiled a sweeping restructuring plan that includes laying off 9,000 employees globally, representing about 11% of its workforce. The move, announced by new CEO Maziar Mike Doustdar, aims to save approximately 8 billion Danish kroner ($1.3 billion) annually by the end of 2026 and address challenges in the increasingly competitive obesity drug market.

Restructuring Details and Financial Impact

The layoffs will affect roughly 9,000 of Novo Nordisk's 78,400 employees worldwide, with 5,000 job cuts occurring in Denmark. The restructuring is set to begin immediately, with affected employees receiving layoff communications over the next few months, subject to local labor negotiations.

This strategic shift will result in a one-off restructuring cost of 8 billion kroner, expected to dampen Novo's full-year operating profit growth. The company has revised its 2025 profit growth forecast to 4-10%, down from the previous projection of 10-16% issued in early August.

Market Challenges and Strategic Realignment

Novo Nordisk's decision comes in response to mounting pressures in the obesity drug market, where it faces increased competition and supply chain challenges. The company's blockbuster drugs, Ozempic for diabetes and Wegovy for obesity, have revolutionized weight loss treatment but have also attracted fierce competition.

Key challenges include:

1. Competition from Eli Lilly's Zepbound, which recently overtook Wegovy in weekly U.S. prescriptions.
2. A surge in compounded versions of GLP-1 drugs, with the market for compounded semaglutide in the U.S. now reportedly equal in size to Novo's GLP-1 business.
3. Manufacturing constraints and supply shortages that have impacted product availability.

Strategic Focus on Diabetes and Obesity

Doustdar outlined three key priorities for the company moving forward:

1. Focus on diabetes and obesity treatments
2. Strengthen commercial execution
3. Realign the company's cost base

The restructuring plan aims to address organizational complexity resulting from Novo's rapid scaling in recent years. The company plans to redirect resources toward growth opportunities in its core diabetes and obesity businesses, investing more in science, commercial capabilities, and manufacturing ramp-up.

Despite this focus, Novo Nordisk maintains that it is not abandoning other areas, with a spokesperson noting "ambitious plans within rare disease, with several exciting product launches over the coming years."

As the pharmaceutical landscape continues to evolve, Novo Nordisk's bold restructuring move signals a determined effort to maintain its leadership in the lucrative but increasingly challenging obesity and diabetes markets.