Novo Nordisk Cuts 9,000 Jobs (11.5%) to Deliver DKK8bn ($1.26bn) Savings - Operating Profit Growth Now 4-10%

Big cost-cutting at Novo Nordisk (COPENHAGEN: NOVO-B) - the maker of Wegovy and Ozempic - as management announced plans to eliminate roughly 9,000 jobs, about 11.5% of its global headcount.

The move is part of a company-wide overhaul aimed at speeding decisions and funneling resources into core diabetes and obesity treatments, the new CEO Mike Doustdar said. Novo Nordisk currently lists about 78,400 roles worldwide; roughly 5,000 of the cuts will be in Denmark.

Crunching the numbers: the company expects the restructuring to deliver around 8 billion Danish crowns (about $1.26 billion) in annual savings. There will be a near-term hit too - one-off restructuring and impairment charges of roughly 9 billion crowns booked in Q3 - with an offsetting 1 billion crowns of savings coming through in Q4. Currency note: $1 = 6.3724 DKK.

Guidance changed. Novo now guides operating profit growth this year to a range of 4%-10%, down from the 10%-16% band it had signalled last month; management says that revision is solely because of the restructuring costs.

Why now? Competition. Wegovy's rapid sales expansion has slowed, particularly in the U.S., as rival drugs - led by Eli Lilly (NYSE: LLY) - and copycat products nibble market share. Supply squeezes earlier in the year also opened the door to manufacturers producing similar formulations, which has pressured growth.

Market reaction has been brutal. Shares of Novo Nordisk have plunged almost 46% year-to-date, erasing huge chunks of value after a summer profit warning and the CEO change; market capitalization fell from roughly $650 billion at its peak to about $181 billion as of the latest close.

Other context: the company already put a global hiring freeze in place in August on non-critical roles. The restructuring is billed as a way to "instill a more performance-based culture" and redirect spending to its leading therapy areas, according to management.

For traders, this is a story of margin repair versus top-line pressure. One-off charges and a lower near-term profit outlook now sit alongside intensifying competition in the obesity space that drove the whole saga. Will the cost cuts be enough to steady profit trajectories while Novo defends market share? Time, and the next few quarters of sales data, will tell.