In September 2025, Novo Nordisk, the Danish pharmaceutical leader in the anti-obesity market (Ozempic, Wegovy), announced an 11% workforce reduction. At the same time, the company revised its earnings forecasts for the third time, affecting Danish government growth projections (2025 GDP revised from +3% to +1.4%) and raising concerns about economic stability. This case illustrates that even leading companies can face unexpected challenges.
What drove this situation?
- Growing competitive pressure. Eli Lilly stormed into the anti-obesity market (Mounjaro, Zepbound), investing big in large-scale production, expanding US insurance coverage, and strengthening partnerships with healthcare systems and pharmacies. Result? Novo Nordisk's market share got hammered, especially in North America.
- Market hitting maturity. After the initial 2023-24 boom, demand for GLP-1 drugs (regulating blood sugar and appetite) stabilized, shrinking growth margins.
- Tariffs and geopolitical tensions. US tariffs jacked up export costs, creating supply chain uncertainty and investor distrust. The impact hit margins hard and made the stock more volatile.
- Organizational complexity. A company structure that grew too fast, especially in support areas like sales, marketing, and admin, created inefficiencies. The hiring spree wasn't backed by proper processes and systems, causing role overlaps and decision bottlenecks. Poor coordination between functions killed market responsiveness, and structural costs grew faster than revenue.
How is the company fighting back?
Novo Nordisk has outlined plans to save $1.25 billion annually by 2026 through measures including: reducing approximately 9,000 positions, focusing on non-core roles and recent hires; reinvesting strategically in research, development, and production capacity.
What can we learn from this?
- No position is bulletproof. Even a market leader with game-changing products can get hit fast. You need preventive strategies, including competitive defense actions like quarterly war games to test your business model's resilience against new players and market changes.
- Diversification isn't optional. Heavy dependence on the anti-obesity segment amplified the competitive hit. You need to balance growth and resilience, avoiding any single product or market representing too much of your revenue (think >30% of revenue mix).
- Integrate geopolitics into strategy. Global trade policies, like US tariffs, can immediately impact margins and supply chains. You must develop political risk scenarios and simulate the impact of new trade barriers in strategic planning.
- Communicate quickly and clearly. CEO Mike Doustdar said: "Our markets are evolving, particularly in obesity, as they have become more competitive and consumer-driven. Our company must evolve as well". Transparent and timely communication, ideally within 48 hours, helps maintain credibility and trust with investors, employees, and stakeholders.
- Cut costs without killing strategic capabilities. The restructuring protected core areas like R&D and production while reducing support roles. Cuts must be targeted and protect the competencies that give you competitive advantage.
- Keep innovating during crisis. Novo Nordisk kept investing in innovation through strategic partnerships and EMA approvals for Rybelsus, proving that the innovation pipeline can't stop during tough times.
Test your business resilience: 5 key questions
- If our main product lost 50% market share in 12 months, would we survive?
- Who are the three players that could threaten our business model in the next 24 months?
- Do we have enough cash flow and cost structure to survive 18 months of 30% revenue drop?
- What are the critical capabilities and skills we can't afford to lose?
- Has our crisis communication plan been tested in the last six months?
Business resilience gets built before crises hit. Reaction speed matters, but it's the preventive strategic choices that determine whether an organization comes out stronger or weaker. The question isn't "if" a crisis will come, but "when" – and how ready we'll be to handle it without compromising our strategic capabilities.
Sources: New York Times, Fortune, Il Sole 24 Ore – September 2025
This article is based on publicly available sources and does not make claims about wrongdoing by any individual or organization.
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