Novo Nordisk SACRIFICES 9,000 Employees In The Name of “Reducing Complexity”

Novo Nordisk just took a “taste of its own medicine” literally… 

Novo, the once-crowned king of fat-melting injectables now in full retrenchment mode. The new CEO, Maziar Mike Doustdar, is swinging the axe across 11% of the workforce (roughly 5,000 of them in Denmark), promising $1.25B in annual cost savings by 2026. 

(Source: Giphy) 

In short, Novo has enjoyed itself as Europe’s most valuable company barely a year ago. Today though is a different story. Shares are down 60% from their peak, Eli Lilly is waiting outside with a baseball bat when it comes to U.S. weight-loss market share, and investors are still salty about a profit warning that gutted guidance.

(Source: Wall Street Journal) 

Meaning, while most look at the layoffs as “just” headcount trimming… they’re paired with $1.3B in one-off charges from shuttered R&D projects and closed manufacturing sites. Translation: Novo is cleaning house after years of chasing “hyper-growth” that got out over its skis. So where did it go wrong for the home of the “I don’t have to go to the gym” free card? Well, two big misses: For starters, you have the competition which is a given. Lilly’s Zepbound/Wegovy knockoffs are cheaper, better marketed, and flooding the U.S. consumer space. Novo moved too slow in pivoting from being a sleepy diabetes firm to a direct-to-consumer weight-loss machine. Additionally, you have the execution. For example, supply chain snags and half-baked trials have basically scared the life out of investors. The science isn’t bad (GLP-1s still print money), but Novo let the narrative slip. And in pharma, narrative is half the multiple.

With that said, Doustdar is selling the cuts as a way to “reduce complexity” and reinvest in growth… i.e., funnel cash into U.S. sales channels and late-stage R&D like pacemaker-level obesity assets. Novo is already spending billions on new U.S. manufacturing capacity in North Carolina to pump out more Wegovy pens. 

(Source: Giphy) 

So yeah, given this… what do we do with the layoff guillotine? In the short term, investors will likely cheer the announcement because Wall Street loves a good blood sacrifice. Less bloat = more margin. However, guidance for 2025 operating profit was cut in half (down to 4–10% growth vs. 16–24% just months ago). So don’t expect topfline fireworks until those reinvestments hit the pipeline.

As for the long term view, the GLP-1 war is far from over. Obesity is a $100B+ market by 2030. If Novo can stabilize, it’s still a duopoly with Lilly. But screw up again, and they risk becoming the MySpace of weight-loss pharma. Moral of the story? Novo’s employee “diet” might keep them alive, but it’s not a miracle cure. They still need to prove they can compete with Lilly and rebuild investor trust. Until then, expect volatility… and probably more layoffs dressed up as “agility.” Until next time, friends…

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.