NEW YORK — Pharmaceutical giant Novo Nordisk, best known for its obesity drug Wegovy, announced a global hiring freeze for non-business critical roles on Wednesday as it copes with sinking profits and fierce market competition.
The move comes shortly after the company posted a profit warning in July, which triggered a staggering $70 billion writedown in its market capitalization, one of Europe’s largest firms to ride the weight-loss drug boom.
CEO’s Strategy for Cost Control
Mike Doustdar, the newly appointed CEO who stepped into the role on August 7, revealed in an interview with Danish broadcaster TV2 that the freeze is part of broader cost-saving efforts.
“We currently have a hiring freeze in non-business critical areas,” the company said in an emailed statement, adding that layoffs could be considered if necessary.
This is the latest in a series of moves by Novo Nordisk to rein in operating costs while remaining competitive amid aggressive pricing and growing challenges from generic forms of its GLP-1 drugs and emerging rivals like Eli Lilly, whose competing weight-loss treatments have added pricing pressure.
The Economic Storm Behind the Decision
The extraordinary decline in market value reflects how weight-loss drug demand has become volatile and highly competitive. Revenue expectations are increasingly uncertain as legislation around compounding pharmacies and pricing intensifies in key markets like the U.S. Novo Nordisk previously warned of challenging growth earlier this year, prompting cost-reduction discussions under its prior CEO.
Industry Implications and Employee Impact
Analysts say the hiring freeze and potential layoffs could affect R&D and expansion plans. Given Novo’s heavy reliance on revenue from its obesity and diabetes products (which account for over 90% of its business), any operational disruptions may hamper its ability to innovate or respond dynamically to market threats.
Late Tuesday, employees at research sites and regional offices reportedly expressed concern, though union representatives have yet to speak publicly. Market sentiment remains cautious amid fears this is only the first of many steps toward cost-cutting.
Political and Health Repercussions
Novo’s actions also come amid increased scrutiny from regulators and price-watchers in the U.S., as cost of care and obesity treatments remain politically sensitive. The hiring freeze may ease near-term expense pressures, but critics argue the company should use its profits to continue breakthroughs rather than shrink staffing, especially in R&D areas critical to healthcare advancement.
What Comes Next
Investors will closely monitor the impact of the freeze on future financial performance and drug pipeline progress. Key indicators will include updates on layoffs, productivity metrics, R&D revisions, and competitive positioning against rising rivals.
If layoffs materialize—and with no public timeline given—the move could foreshadow deeper restructuring. Either way, the freeze signals Novo Nordisk’s shift to conservative management as it navigates an increasingly turbulent pharmaceutical landscape.