Novo Nordisk, the maker of in-demand drugs Ozempic and Wegovy, said it will cut thousands of global jobs to simplify operations and reallocate resources toward its diabetes and obesity drugs as rivals take a bite out of the market share.
The company announced on Wednesday that it intends to reduce the global workforce by approximately 9,000 of the 78,400 positions in the company, with around 5,000 cuts expected in its home country of Denmark.
The company is putting more money and effort into how it sells its diabetes and obesity products and by developing new medicines to target those conditions.
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The cuts will take place across the company, including staff areas and headquarters functions. The company will begin notifying employees over the next few months.
Novo Nordisk said the transformation reflects the company’s commitment to “meet rising global demand while also competing in a more dynamic and consumer-driven obesity market, as evidenced by the recent slowdown in growth.”
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The company acknowledged that its rapid expansion in recent years has created greater organizational complexity and higher costs. The job cuts are intended to streamline operations and enable the company to further invest in science, commercial capabilities and manufacturing scale-up, according to Novo Nordisk.
“Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well,” Novo Nordisk CEO Mike Doustdar said, noting that this “means instilling an increased performance-based culture, deploying our resources ever more effectively, and prioritizing investment where it will have the most impact – behind our leading therapy areas.”
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The uptick in competition is notably is led largely by Eli Lilly, which has aggressively gained ground due to its versions of weight-loss drugs Zepbound and Mounjaro. Revenue in the second fiscal quarter grew to $10.4 billion mainly because of both drugs, which have the same active ingredient, tirzepatide, but different approved uses.
Novo Nordisk said it also lost market share due to alternative products made by compounding pharmacies that are hurting its profits.
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