Novo Nordisk Layoffs: Market and Economic Fluctuations under Giant Transformation

Recently, Novo Nordisk, the global giant of diabetes and obesity treatment, announced the global layoff of 9000 people, the cancellation of some employee bonuses, and the reduction of its annual expectations. Behind this decision is the cruel reality of the GLP-1 drug market turning from "blue ocean explosion" to "red ocean game". It is also a difficult choice for pharmaceutical giants under the influence of innovation pressure, cost control and geo economy.

Novo Nordisk's predicament stems from multiple challenges to the market position of its core product, semaglutide. In the first half of 2025, the company's sales increased by 18% year-on-year, but the growth rate significantly slowed down from the peak of 26% in 2024. Behind this turning point is the concentrated outbreak of three major structural contradictions: generic drugs are the first to be impacted, and the loose regulation of compound pharmacies by the US FDA has led to a large influx of illegally formulated GLP-1 generic drugs into the market, eroding approximately 15% of Wegovy's US market share; Competitors' technological crushing intensifies competition, and Eli Lilly's Tilpotide has achieved a breakthrough in weight loss effect through the GLP-1/GIP dual target mechanism, with an average weight loss of 24.5% in 52 weeks, an increase of 36% compared to Smeaglutide's 18%. This directly led to Novo Nordisk lowering its hospital coverage target from 80% to 65% in the Chinese market; The pressure on the payment side continues to tighten, with CMS in the United States strengthening the reimbursement review of high priced drugs, and Europe implementing "value oriented pricing", requiring pharmaceutical companies to prove the cost-effectiveness of drugs. Novo Nordisk has to prove the cardiovascular benefits of semaglutide through real-world data to strive for favorable pricing.

In the face of market changes, the new CEO Maziar Mike Doustdar has chosen to reshape competitiveness through a "wrist breaking reform". This layoff covers non core departments such as logistics support and headquarters functions, and is expected to achieve an annualized cost savings of 8 billion Danish kroner by the end of 2026. However, the cost is that the Danish economy has suffered a heavy blow - the country's GDP growth forecast for 2025 has dropped from 3% to 1.4%. Short term hemostasis is the primary goal, with an expected restructuring cost of 9 billion Danish kroner in the third quarter of 2025. However, approximately 1 billion Danish kroner can be saved in the fourth quarter. This strategy aims to alleviate capital market doubts about its profitability. Long term bets determine the future direction, and the funds saved from layoffs will be invested in the research and development of next-generation drugs and emerging market layout, such as the Phase III clinical trial of GLP-1/amygdalin dual target drug Amycritin, as well as increasing Novo Health's online sales share in the Chinese market to 35% through cooperation with JD Health and Alibaba Health. The restructuring of organizational culture is a deep challenge. The integration contradiction between the diabetes business team and the obesity team is prominent. The layoff is seen as a catalyst to break down departmental barriers and establish a "performance culture".

The impact of Novo Nordisk's transformation on the Danish economy far exceeds that of ordinary corporate layoffs. As the largest listed company in Denmark, its market value once exceeded the country's GDP, and it paid corporate tax of 9 billion kronor in 2023, accounting for 5% of the country's corporate tax revenue. The layoffs have directly led to a slowdown in export growth. The Danish government expects export growth to be only 0.9% in 2025, a significant decrease from the 4.3% expected in May. The regional economic shock has affected people's livelihoods. The expansion of the Inno and Nord factories in the town of Kalundborg was expected to create 1250 new jobs, but after the layoff plan was announced, the local supermarket's sales growth forecast was lowered from 20% to 5%. A fast food restaurant's monthly hot dog sales plummeted from 17500 to 8000. The policy dilemma has intensified the balance problem, and the Danish central bank has long maintained its key interest rate at a level lower than the European Central Bank to prevent excessive appreciation of the Danish krone. Now, the uncertainty of corporate transformation has increased, and the space for monetary policy has further narrowed.

The layoff scandal at Novo Nordisk marks the transition of the GLP-1 market from "wild growth" to "intensive cultivation". For industry participants, the competition in the R&D pipeline determines the future pattern. Who can be approved for additional indications such as cardiovascular benefits and non-alcoholic fatty liver disease first, and who will occupy the incremental market of elderly patients, etc; Innovative payment models reshape the logic of competition, with Lilly providing direct access to patients through e-commerce platforms, while Novo Nordisk relies on its "metabolic management center" to provide online consultation, prescription, and delivery closed-loop services; Geopolitical risk diversification tests global layout, domestic substitution in the Chinese market accelerates, GLP-1 drugs from local companies such as Xinda Biotech and Hengrui Pharmaceuticals enter phase III clinical trials, and Novo Nordisk needs to optimize its global pricing system to resist cost-effectiveness competition.

The layoffs of Novo Nordisk are not only a survival strategy for the company to cope with market changes, but also a microcosm of the reshaping of the global pharmaceutical industry landscape. When the rise and fall of a company is enough to affect the economic lifeline of a country, its transformation path is no longer just a business decision, but a profound game about innovation, efficiency, and social responsibility.