Danish pharmaceutical giant Novo Nordisk (NVO) has announced plans to cut 9,000 jobs or 11.5% of its global workforce.
In a news release announcing the workforce reduction, the company, which produces the Wegovy weight-loss medication, said “Novo Nordisk today announced 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.”
About 5,000 of the job cuts will occur in the company’s home country of Denmark and result in a
one-time cost of $1.26 billion U.S.
Due to the layoff costs, Novo Nordisk said that it now expects full-year operating profit growth of 4% to 10%, down from the 10% to 16% outlined in its recent second-quarter results.
The lowered headcount is the first major move by new CEO Maziar Mike Doustdar, who took the helm of the pharma company in August following the ouster of Lars Fruergaard Jørgensen.
Novo Nordisk, once the leader in weight-loss drugs, is struggling to maintain market share, especially in U.S., amid supply chain issues and competition from rival Eli Lilly (LLY).
The company is also dealing with negative sentiment on Wall Street after disappointing trial results for its next-generation obesity drugs, notably a pill version of Wegovy.
Doustdar said he was assuming the CEO position with a sense of urgency and three priorities.
Those priorities include defending Novo Nordisk’s leadership in obesity treatments, fostering a high-performance culture, and driving cost efficiencies.
NVO stock is down 38% this year and trading at $54.30 U.S. per share.
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