The competition in weight loss drugs is fierce, Novo Nordisk is laying off 9,000 employees globally, and has lowered its profit forecast for the third time this year
Faced with the strong pursuit of competitors such as Li Auto and the impact of generic drugs, Danish pharmaceutical company Novo Nordisk plans to lay off 9,000 employees globally, accounting for 11% of its total workforce. At the same time, the company has lowered its profit forecast for the third time this year, expecting an annual operating profit growth of 4% to 10%, far below the previous highest growth forecast of 27%
The "myth" of the weight loss drug market seems to be fading.
Faced with increasingly fierce market competition and declining performance, Danish pharmaceutical giant Novo Nordisk A/S is taking drastic restructuring measures. The company announced on Wednesday, September 10, that it will lay off 9,000 employees globally and has lowered its profit growth forecast for the third time this year, highlighting the immense pressure it faces in the weight loss drug market.
This layoff plan will affect 11% of Novo Nordisk's global workforce, including 5,000 employees in Denmark, aiming to save 8 billion Danish kroner (approximately $1.3 billion) by the end of 2026.
Novo Nordisk has also significantly lowered its financial guidance. The company now expects its operating profit to grow by 4% to 10% for the year, at fixed exchange rates, far below the growth forecast of 27% made in February this year. This marks the third time the company has revised its profit expectations downward this year.
Competitive Pressure and Market Setbacks
Behind this large-scale restructuring is Novo Nordisk's retreat in the critical U.S. weight loss drug market. According to Bloomberg reports, the company has lost its leading position in this market, overtaken by competitor Eli Lilly.
Additionally, "cheap generic drugs" from U.S. compound pharmacies pose a continuous threat to its sales, further eroding its market share and profitability. The company is striving to recover from a "sharp decline in performance."
New Leadership and Restructuring Plans
This series of radical measures is led by newly appointed CEO Mike Doustdar, who took office last month. Reports indicate that Doustdar has called for enhanced spending discipline and prudence since taking over, and has implemented initial measures such as freezing non-essential hiring and retracting job offers for new employees. He described the layoffs as a difficult but correct decision focused on the future.
Novo Nordisk stated that the layoffs are part of a company-wide transformation plan aimed at simplifying the organizational structure, improving decision-making speed, and reallocating resources to core growth areas such as diabetes and obesity. The company added that it will communicate with affected employees in the coming months and take other measures to enhance its "performance culture."
