Driven by the unprecedented success of its weight-loss drug Wegovy, Danish pharmaceutical giant Novo Nordisk embarked on a massive five-year hiring spree that saw its workforce nearly double. The company’s employee count surged from approximately 43,260 in 2019 to 77,350 by the end of last year, a growth rate that far outpaced its main competitor, Eli Lilly. This expansion was a direct response to booming demand, requiring increased manufacturing capacity and a larger global sales force to support the blockbuster drug.
However, this period of rapid growth is now under intense scrutiny from investors and new management. Facing rising cost pressures and fierce competition from Lilly’s rival drug Zepbound and cheaper alternatives, Novo Nordisk’s profitability has been squeezed, with its gross margin falling to a two-and-a-half-year low. The company’s market capitalization has also plummeted by $490 billion from its peak, prompting two profit warnings this year and a forecast that sales could decline in late 2025.
In a decisive move to address these challenges, new CEO Maziar Mike Doustdar announced a global hiring freeze for non-critical roles just two weeks into his tenure. Doustdar has pledged to leave no stone unturned in his search for savings, explicitly naming employee costs—which have nearly doubled to $9.9 billion—as an area for review. While the company has not detailed specific headcount reduction plans, this freeze signals a major strategic shift from its previous growth-at-all-costs approach.
This new era of austerity marks a significant turning point for the firm, which recently became Europe’s most valuable company. Analysts suggest that Novo Nordisk had grown “complacent” during its period of immense profitability, allowing costs to balloon. The appointment of Doustdar and the immediate implementation of a hiring freeze demonstrate a clear intent to streamline operations, improve margins, and navigate an increasingly competitive market.
