Danish pharmaceutical giant Novo Nordisk, spurred by massive profits, has announced plans to axe at least 9,000 jobs. The layoffs make up of 11.5% of the company’s international staff. The announcement demonstrates another bold step in response to continued, unrelenting market forces. It also serves to underscore the company’s problems in maintaining its competitive advantage, especially in the extremely essential U.S. market.
The company has been struggling with supply chain challenges and increased competition from competitors like Eli Lilly. Moreover, Novo Nordisk has recently started to downplay its market strategy by the risk from lower-priced compounded weight loss drugs that have recently deeply complicated its market strategy. The company raised its guidance for full-year comparable operating profit growth, which it now anticipates will increase 4% to 10% at constant currency. This is a significant step down from the 10% to 16% forecast it made in its second quarter results back in August.
In response, pharmaceutical giant Novo Nordisk has made the bold move to simplify their business. This step will incur an upfront cost of 8 billion Danish kroner, or about $1.26 billion. Maziar Mike Doustdar, the recent new CEO and President at the helm of the young company is quite the character. This replacement is his first big action since assuming that post himself last month. Doustdar took over from Lars Fruergaard Jørgensen and has quickly set down three core priorities for the company in the years ahead.
Perhaps one of Doustdar’s foremost goals is to promote a stronger performance-based culture across the organization. He emphasized that the company needs to pivot to a new market dynamic. This is particularly true for the obesity field, which has become increasingly competitive and consumer-focused.
“Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well. This means instilling an increased performance-based culture, deploying our resources ever more effectively, and prioritising investment where it will have the most impact – behind our leading therapy areas,” – Maziar Mike Doustdar
The shift further streamlines Novo Nordisk’s organizational structure. It accelerates product development and smartly re-prioritizes staff and funds to focus on attractive new areas of growth, particularly in diabetes and obesity. This strategic decision internalizes a big-picture approach to tackling the challenges of today while setting the company up for success in the future.