Wegovy-maker Novo Nordisk (NOVOb.CO), opens new tab will cut 9,000 jobs, or about 11.5% of its workforce, in a restructuring to save 8 billion Danish crowns ($1.26 billion) annually, it said on Wednesday, as it battles rising pressure from U.S. rival Eli Lilly (LLY.N), opens new tab.
“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,” it said in a statement.
The company, which is also known for its Ozempic diabetes treatment, already said in August that it had implemented a global hiring freeze covering job roles that were not critical for its business.
Novo, which currently has 78,400 positions globally, said about 5,000 of the job cuts will be in its native Denmark.
“Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well,” newly appointed CEO Mike Doustdar said in the statement.
“This means instilling an increased performance-based culture, deploying our resources ever more effectively, and prioritising investment where it will have the most impact – behind our leading therapy areas,” he added.
As part of the restructuring, Novo will report one-off restructuring costs of 9 billion Danish crowns in the third quarter, including impairment charges, but also expects 1 billion crowns of savings in the fourth quarter, it said.
Novo said its operating profit growth this year is now expected at between 4% and 10%, down from between 10% and 16% seen last month, changing solely due to the restructuring costs.
Novo, which became Europe’s most valuable listed company worth $650 billion last year on booming sales of Wegovy, is facing a pivotal moment as the medicine loses market share and sees sales growth slow, especially in the United States.
It has warned of far slower growth this year, in part due to compounders who have been allowed to make copycat medicines based on the same ingredients as Wegovy due to shortages.
Investors in July wiped $70 billion off the drugmaker’s market value after Novo issued a profit warning and named company veteran Doustdar as its new CEO.
Its shares have fallen nearly 46% since the start of the year, lowering its market value to about $181 billion as of Tuesday’s close.
