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Can Novo Nordisk's Restructuring Program Drive its Return to Growth?

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Key Takeaways

  • Novo Nordisk will cut 9,000 jobs, saving DKK 8B annually by 2026 to reinvest in R&D and manufacturing.
  • NVO lowered 2025 profit guidance after slower uptake of Wegovy and Ozempic amid rising competition.
  • The restructuring brings DKK 8B in charges, with most costs booked in Q3 2025, partly offset in Q4.

In September 2025, Novo Nordisk (NVO - Free Report) , under the leadership of its new CEO Mike Doustdar, unveiled a major restructuring plan designed to restore momentum in its core businesses and counter mounting competitive pressures. The plan, effective immediately, focuses on streamlining operations, accelerating decision-making speed and redeploying resources toward the company’s two main growth engines — diabetes and obesity.

The transformation involves reducing Novo Nordisk’s global workforce by about 9,000 positions, including 5,000 in Denmark, representing roughly 11% of its total employee base. Management estimates that these changes will yield annualized savings of around DKK 8 billion by 2026. Importantly, these savings will be reinvested into R&D, commercial execution and manufacturing scale-up to meet surging global demand for GLP-1 therapies.

The restructuring comes at a critical juncture. In July, Novo Nordisk cut its 2025 sales and profit outlook, citing slower-than-expected uptake of its semaglutide-based drugs, Wegovy and Ozempic. Competitive pressure has intensified as Eli Lilly’s tirzepatide-based therapies, Mounjaro for diabetes and Zepbound for obesity, rapidly gain market share. At the same time, the rise of compounded semaglutide in the United States, the largest obesity market, has further diluted NVO’s growth prospects.

Financially, the transformation will weigh on near-term performance. Novo Nordisk expects to incur one-time restructuring charges totaling about DKK 8 billion, including impairments. Approximately DKK 9 billion of these costs will be recorded in the third quarter of 2025, partly offset by roughly DKK 1 billion in savings realized in the fourth quarter. Reflecting this hit, the company cut its 2025 operating profit growth guidance to 4-10% at constant exchange rates, down from the previous range of 10-16%.

Despite the short-term drag on profitability, the restructuring is a crucial forward-looking investment to boost Novo Nordisk’s long-term growth. By sharpening focus, boosting operational agility and channeling resources into innovation and scale, NVO aims to bolster its leadership in the obesity and diabetes markets against intensifying competition.

Other Pharma/Biotech Companies Undertaking Restructuring

Bristol Myers Squibb (BMY - Free Report) is restructuring its operations to offset revenue losses from generic competition to legacy drugs such as Revlimid and Pomalyst. Launched in 2023, the program streamlines R&D, manufacturing and commercial operations to accelerate pipeline delivery and boost efficiency. Bristol Myers expanded its scope in 2025, with total charges now expected at $2.5 billion through 2027, $1.4 billion of which has already been incurred.

The effort is projected to deliver $2 billion in annual savings by 2027, creating a leaner model to lift the bottom line despite slowing sales. Bristol Myers anticipates 2025 operating expenses to rise to $16.5 billion from prior estimates of $16.2 billion. The increase reflects BMY’s investments in recent business development transactions and the identification of additional investment opportunities within its Growth Portfolio.

Another pharma giant, Merck (MRK - Free Report) , is also restructuring operations. MRK had earlier launched a multiyear optimization initiative to transform its portfolio. In July 2025, Merck undertook a new restructuring program to eliminate certain administrative, sales and R&D positions, even though it will continue to hire employees into new roles across strategic growth areas of the business. MRK will reduce its global real estate footprint and continue to optimize its manufacturing network.

Merck expects these actions to result in annual cost savings of approximately $1.7 billion, which will be substantially realized by the end of 2027. This restructuring program is part of the multiyear optimization initiative expected to achieve $3.0 billion in annual cost savings by the end of 2027.


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