Novo Nordisk (NVO) has started cutting jobs in the United States, its most important market, with employees set to be notified over the next two weeks, according to Reuters, which cited an internal email and sources familiar with the plans. This is the first reported timeline for U.S. layoffs and comes as the Danish drugmaker, best known for its weight-loss drug Wegovy, looks to trim costs worldwide. The cuts are part of the firm’s plan to compete with U.S. rival Eli Lilly (LLY), which has been gaining ground in the obesity drug market.
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The U.S. job cuts began on Tuesday and will continue until late next week, following a wave of layoffs in Denmark, where Novo plans to cut 5,000 positions. The email showed that a wide range of departments will be impacted, including human resources, clinical development, rare diseases, medical and regulatory teams, legal, ethics and compliance, marketing, sales, finance, and public affairs. Although the exact number of employees in the U.S. has not been confirmed, Novo is working toward a global target of eliminating 9,000 jobs.
These changes come as new CEO Mike Doustdar looks to rebuild investor confidence after a slowdown in Wegovy sales and a falling share price led to the exit of former CEO Lars Fruergaard Jorgensen. Doustdar has promised to tighten Novo’s focus on commercial performance and on its core areas of obesity and diabetes treatments.
Is NVO Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NVO stock based on six Buys, two Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVO price target of $60.73 per share implies 6.8% upside potential.
