Wegovy-maker to slash 9,000 jobs as competition grows | REUTERS

Novo Nordisk is undergoing a significant restructuring, announcing plans to cut 9,000 jobs, which represents 11-12% of its workforce. This move is aimed at simplifying operations and accelerating decision-making, allowing the company to reallocate resources towards growth areas and save approximately $1.3 billion annually. The company is facing increased competition and a slowdown in sales growth, particularly in the US market.

This strategic overhaul follows a profit warning issued in July, which contributed to a nearly 46% drop in Novo Nordisk's share price since the beginning of the year. CEO Mike Dustar, who recently took the helm, stated that the company must adapt as its target markets, especially in obesity, have evolved. The projected operating profit growth for this year has been revised downwards to between 4% and 10%, a significant decrease from the previously anticipated 10-16%, due to these restructuring costs.

• Novo Nordisk will eliminate 9,000 jobs, constituting 11-12% of its staff.
• The company aims to save about $1.3 billion annually through this restructure.
• This move is intended to simplify the company and improve decision-making speed.
• Resources will be reallocated towards growth opportunities as star drugs face market share loss and sales growth slows.
• Novo Nordisk shares have dropped nearly 46% year-to-date, following a July profit warning that revised operating profit growth down.

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Novo Nordisk Job Cuts and Restructuring [0:01]

• Novo Nordisk is implementing a major restructuring that includes cutting 9,000 jobs.
• This represents 11-12% of its total workforce.
• The primary goal of this restructure is to save approximately $1.3 billion annually.
• The company aims to simplify its operations and enhance the speed of decision-making.

This strategic move is designed to streamline Novo Nordisk's operations and achieve substantial annual savings, while also improving its agility in responding to market dynamics.

Novo Nordisk wants to slim down its workforce. The weight loss drug said Wednesday it will cut 9,000 jobs or 11% of its staff. It's part of a restructure to save about 1.3 billion yearly.

Challenges and Market Evolution [0:15]

• Novo Nordisk is at a critical juncture as its leading drugs are losing market share.
• Sales growth has decelerated, notably in the United States, a key market with a strong competitor in Eli Lilly.
• The company believes it can reallocate resources effectively towards new growth opportunities.
• CEO Mike Dustar, who recently assumed leadership, stated that the company must adapt to evolving target markets, especially in the obesity sector.

The company is facing headwinds from increased competition and a slowing sales trajectory, necessitating strategic adjustments to capitalize on future growth prospects.

Novo has reached a key moment in its development as its star drugs lose market share. Sales growth has also slowed, especially in the US, home of key rival Eli Liy. ... the company must evolve as their target markets have changed, particularly in obesity.

Financial Impact and Share Performance [0:49]

• Novo Nordisk issued a profit warning in July, causing its shares to fall significantly.
• Operating profit growth for the current year is now projected to be between 4% and 10%.
• This revised forecast is a notable decrease from the 10-16% range predicted just last month.
• The reduction in profit outlook is attributed solely to the costs associated with the restructuring efforts.
• Since the start of the year, Novo Nordisk shares have experienced a decline of nearly 46%.

The company's financial performance has been significantly impacted by these restructuring costs, leading to a substantial downturn in its stock value.

Novo shares fell heavily in July when the firm issued a profit warning. Operating profit growth this year is now expected at between 4 and 10% down from between 10 and 16% seen last month. That is solely due to restructuring costs. Novo shares have fallen nearly 46% since the start of the year.