The Danish maker of the weight-loss and diabetes drugs Wegovy and Ozempic is to cut 9,000 jobs as it slashed its profit forecast again, amid fierce competition from its US rival Eli Lilly.
Novo Nordisk’s decision to cut 11% of its global workforce of 78,400 is an attempt by the new chief executive, Mike Doustdar, to revive its fortunes.
Sales of its blockbuster injection Wegovy have slowed sharply as it has lost ground to Eli Lilly’s Mounjaro jabs, as well as cheaper versions by generic drugmakers, while the pharmaceutical sector faces the threat of targeted US tariffs.
The drugmaker said that 5,000 of the job losses would be in its home country of Denmark. The share price rose by 2.1% by Wednesday afternoon as investors were cheered by the cost savings
Booming sales of GLP-1 diabetes and obesity drugs in recent years had helped Novo Nordisk rise to become Europe’s most valuable company, but it lost the title in March, only briefly regaining it in June.
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. It can be prescribed by private doctors “off label” for weight loss.
The drugmaker 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 the company to cut its operating profit growth forecast for 2025 from 10%-16% to 4%-10%.
They are the first major move by Doustdar, an Iranian-born Austrian-American businessman who took over last month from Lars Fruergaard Jørgensen, who had led the company since 2017 and hinted at redundancies 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 had disappointing results for 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 been damaged by “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”.
Bank of America analysts said they now expect Novo Nordisk to issue a fourth profit warning when it reports third-quarter results in November, doubting the company can meet the top end of its sales forecast.
Along with other European pharmaceutical firms, Novo Nordisk also faces repeated threats from Donald Trump to impose sector-specific tariffs on imports from drugmakers that 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 users inject themselves with once a week.
Eli Lilly paused UK orders for Mounjaro last month before hefty price rises across all doses from 1 September, to prevent inappropriate stockpiling of medicines, it said.
It increased the UK list price by up to 170% depending on the dose, although a discount to suppliers has been secured that should limit the impact on consumers, amid a White House push to get drugmakers to raise prices in Europe to enable them to cut high US prices.
Mounjaro users were dismayed at the news, worried they would be unable to continue with the medication.
