Eliza Wong
A Sudden Corporate Overhaul
On September 10, Danish pharmaceutical giant Novo Nordisk sent shockwaves through global markets by announcing plans to cut 9,000 jobs worldwide. This represents approximately 11.5% of its total workforce and marks one of the most significant restructuring efforts in the company’s century-long history. The move comes just months after the dismissal of former CEO Lars Fruergaard Jørgensen (周德赋) and represents the first major strategic decision under new leadership.
In an official statement, the company explained: “Novo Nordisk today announced a company-wide restructuring plan aimed at simplifying the organizational structure, accelerating decision-making, and reallocating resources to capture growth opportunities in diabetes and obesity.” The insulin and weight-loss drug manufacturer currently employs approximately 78,400 people globally, with about 5,000 of the affected positions located in its home Danish market.
The restructuring is expected to generate annual savings of approximately 8 billion Danish kroner (about $1.26 billion). The company had already implemented a global hiring freeze last month covering non-critical business units. Novo Nordisk China has not yet responded to inquiries about whether the layoffs will affect its Chinese operations.
Leadership Shakeup Precedes Drastic Measures
The massive layoff announcement follows a dramatic leadership change that saw the departure of longtime CEO Lars Fruergaard Jørgensen (周德赋) in May. According to Novo Nordisk’s compensation reports, Jørgensen received approximately 68.2 million Danish kroner (about $9.52 million) in total compensation for 2023. However, due to the company’s declining stock performance, his 2024 compensation was reduced to 57.1 million Danish kroner (about $7.97 million) before his dismissal.
In July, the company appointed internal veteran Maziar Mike Doustdar (齐亚尔·迈克·杜斯特达) as the new CEO. The market reaction was immediate and severe—company shares plummeted nearly 30% on the announcement day, wiping approximately $70 billion from Novo Nordisk’s market valuation.
Doustdar addressed the restructuring in a recent statement: “The market is changing, especially in obesity, where competition is intensifying and consumer dynamics are evolving. Our company must evolve too. This means instilling a more performance-oriented culture, allocating our resources more effectively, and focusing investments on areas with the greatest impact.”
Financial Performance and Revised Outlook
Novo Nordisk has revised its 2024 operating profit growth forecast to between 4% and 10%, down from previous estimates of 10% to 16%. The company attributes this adjustment to restructuring costs. As part of the reorganization, Novo Nordisk expects to report a one-time restructuring cost of approximately 9 billion Danish kroner in the third quarter but anticipates savings of around 1 billion Danish kroner in the fourth quarter.
The company’s stock has suffered dramatically over the past year, declining nearly 60% with a more than 30% drop in 2024 alone. Current market capitalization stands at approximately $241 billion, representing a staggering loss of over $350 billion from its peak valuation just one year ago.
The GLP-1 Revolution and Intensifying Competition
Novo Nordisk rose to become Europe’s most valuable company on the back of its blockbuster GLP-1 drugs, particularly semaglutide, marketed as Ozempic for diabetes and Wegovy for weight loss. The medication gained celebrity endorsements from figures like Elon Musk, driving unprecedented demand and revenue growth. According to Novo Nordisk’s Q1 2025 earnings report, the company generated total revenue of 78.087 billion Danish kroner (approximately $11.216 billion), representing an 18% year-over-year increase. Semaglutide products alone accounted for approximately 71% of total revenue.
However, the pharmaceutical landscape is shifting rapidly. The GLP-1 market presents enormous opportunities but faces increasingly fierce competition. According to a research report from Founders Securities, as of July 1, 2024, 31 GLP-1 innovative drugs with weight loss indications have entered clinical application and trial stages in China. Companies including Innovent Biologics, Hengrui Pharmaceuticals, and Borg Pharmaceutical have advanced pipelines. Founders Securities estimates that with the gradual approval of domestically produced GLP-1 weight loss drugs, the market share of Chinese-made products will rapidly increase, potentially reaching a market size exceeding 37.852 billion yuan by 2030.
The Lilly Challenge
The competition between the “weight loss drug duopoly” of Novo Nordisk and Eli Lilly has drawn significant attention. Lilly’s growth momentum has been equally impressive. According to Lilly’s Q1 2025 earnings report, the company achieved total revenue of $12.729 billion, a 45% year-over-year increase, with net profit of $2.759 billion, up 23%. This robust performance was largely driven by tirzepatide, a GLP-1/GIP dual agonist whose two indications collectively contributed $6.15 billion in revenue, accounting for approximately 48% of the company’s total.
While semaglutide maintained global sales leadership in Q1 2025, even surpassing Merck’s Keytruda to temporarily claim the title of world’s “drug king,” tirzepatide has demonstrated clinical superiority. On May 11, Lilly released detailed results from the SURMOUNT-5 study, which evaluated the efficacy and safety of tirzepatide versus semaglutide in adults with obesity or overweight with at least one comorbidity. At week 72, tirzepatide met the primary endpoint and all five key secondary endpoints, demonstrating superiority over semaglutide throughout the trial.
In the crucial U.S. market, semaglutide’s total prescription volume has already fallen behind tirzepatide. Lilly claims leadership in the U.S. incretin analog market with 53.3% of total prescriptions.
Patent Expiration and the Coming Generic Wave
Perhaps the most significant challenge facing Novo Nordisk is the impending expiration of semaglutide’s core patent in 2026. This development is expected to trigger a wave of generic versions entering the market, particularly in China where multiple domestic pharmaceutical companies have advanced generic candidates into late-stage clinical trials.
Companies including Hangzhou Jiuyuan Gene Engineering, Livzon Pharmaceutical Group, CSPC Pharmaceutical Group, Huadong Medicine, China Biologic Products, and Qilu Pharmaceutical have generic versions in advanced development stages, with several expected to gain approval in 2026. Innovent Biologics has already received approval for China’s first domestically developed GLP-1 innovative weight loss drug.
CEO Doustdar has acknowledged the coming competition: “In 2026 and 2027, we may see more players emerge.” However, the company emphasizes that it has always developed amid competition and views innovation as its top priority, noting that generic entry later in a product’s lifecycle when exclusivity expires is a normal pharmaceutical industry pattern.
Market Dynamics in China
In its second-quarter earnings report, Novo Nordisk addressed the fierce global competition in GLP-1 drugs. Doustdar noted that while GLP-1 diabetes drug sales in China have declined, weight loss drug sales are gradually increasing. He explained that the diabetes sales decrease resulted from changes in distributor inventory, while the weight loss indication of semaglutide, approved just last year, is still in its volume growth phase and has not yet penetrated second, third, and fourth-tier cities.
The company stated it is taking measures to further enhance commercial execution, ensure cost efficiency, and continue investing in future growth. Despite the challenges, Novo Nordisk remains committed to maintaining its leadership position through innovation and strategic adaptation to market changes.
Strategic Implications and Future Outlook
Novo Nordisk’s dramatic restructuring reflects the pharmaceutical industry’s rapid evolution, particularly in the lucrative GLP-1 market. The company’s decision to cut 9,000 jobs represents a proactive attempt to streamline operations and reallocate resources toward maintaining competitiveness amid increasing pressure from rivals and impending generic competition.
The leadership change from Jørgensen to Doustdar signals a strategic shift toward greater performance orientation and operational efficiency. The new CEO’s emphasis on instilling a performance-oriented culture and focusing investments on high-impact areas suggests a more aggressive approach to navigating the challenging market environment.
While the short-term financial impact includes significant restructuring costs, the anticipated annual savings of approximately $1.26 billion could provide Novo Nordisk with additional resources to invest in research and development, potentially yielding next-generation treatments that could help the company maintain its market position beyond the semaglutide patent expiration.
Investment Perspective
For investors, Novo Nordisk’s restructuring presents both challenges and opportunities. The significant workforce reduction and leadership changes indicate serious concerns about competitive pressures and future growth prospects. However, the company’s continued dominance in the GLP-1 market, coupled with its strategic efforts to adapt to changing market conditions, suggests potential for recovery and future growth.
The coming years will be critical as the company navigates patent expirations, generic competition, and the need to innovate beyond its current blockbuster drugs. Investors should closely monitor the company’s R&D pipeline, market share dynamics, and ability to execute its restructuring plan effectively.
Navigating a Transforming Pharmaceutical Landscape
Novo Nordisk’s massive restructuring and leadership changes represent a pivotal moment for the company and the broader pharmaceutical industry. The convergence of patent expirations, intensifying competition, and market evolution has forced one of the world’s most successful drug makers to undertake dramatic measures to maintain its competitive position.
The company’s future success will depend on its ability to innovate beyond semaglutide, effectively navigate the coming generic competition, and adapt to changing market dynamics. While challenges abound, Novo Nordisk’s strong market position, financial resources, and strategic restructuring provide a foundation for potential future success.
For industry observers, investors, and competitors, Novo Nordisk’s journey offers valuable insights into the strategies employed by market leaders facing disruptive challenges. The coming years will reveal whether these measures will enable the company to maintain its leadership position or if the changing pharmaceutical landscape will reshape the industry hierarchy.
Stay informed about pharmaceutical industry developments by subscribing to our business newsletter and following our coverage of market trends, regulatory changes, and competitive dynamics that could impact investment decisions and strategic planning.
