Novo Nordisk announced plans to reduce its workforce by approximately 11%, eliminating 9,000 positions. The move comes as the company, now under the leadership of CEO Mike Doustdar, seeks to revitalize its operations in an increasingly competitive market for obesity drugs.

the job cuts are projected to yield annual savings of $1.26 billion by the close of 2026. According to Novo, this restructuring is part of a larger initiative to streamline the institution, accelerate decision-making processes, and allocate more resources to bolster growth in its core diabetes and obesity divisions.

Approximately 5,000 of the job losses will occur in Denmark. Novo Nordisk currently employs over 78,000 peopel worldwide.

“It is always arduous 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,” Mike Doustdar said in a statement. “We need a shift in our mindset and approach so we can be faster and more agile.”

Due to restructuring expenses, Novo Nordisk has revised its operating profit growth forecast for the year to a range of 4% to 10%, calculated at constant exchange rates. The company has adjusted its financial outlook several times during the year.

Acknowledging the impact of the layoffs on staff, Doustdar also said in a video posted on his LinkedIn that “every krone will be reinvested into growth, advancing R&D, expanding manufacturing, and improving commercial execution and patient access worldwide.”

Competitive Pressures and Market Dynamics

Novo Nordisk has been a dominant player in the GLP-1 market, especially with its drugs Wegovy and Ozempic.However, the company has faced challenges in maintaining its market share as competitors like Eli Lilly have gained ground, particularly with Zepbound in the U.S. obesity market.

“We need a shift in our mindset and approach so we can be faster and more agile.”

The company has also cited the impact of compounded versions of semaglutide, the active ingredient in Ozempic and Wegovy, as a factor hindering its growth in the U.S.

Concerns about a conservative corporate culture impacting research and marketing strategies have also been raised, though Novo Nordisk executives have disputed this assessment.

Novo Nordisk’s share prices have decreased by over 50% in the last year. In May, Lars Fruergaard Jørgensen stepped down as CEO, citing the company’s performance struggles.

Doustdar emphasized the need to foster a “performance-based culture” within the organization.

“As the global leader in obesity and diabetes, Novo Nordisk delivers life-changing products for patients worldwide,” he stated. “But our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well.”