Novo Nordisk Freezes Hiring as Costs Rise Despite Wegovy FDA Approval

BAGSVAERD, Denmark, Aug. 21, 2025 — Novo Nordisk has announced a global hiring freeze on non-critical roles as a cost-cutting measure, with which the Danish drugmaker hopes to regain its stronghold in the competitive market for weight-loss treatments.

Implementation of the hiring freeze comes just days after the US Food and Drug Administration (FDA) approved a new indication for Wegovy (semaglutide) injection 2.4 mg.

Notably, the halt on hiring will apply across all markets and departments, with the exception of business-critical roles, a company spokeswoman said on Wednesday. Earlier this month, Novo Nordisk reported second-quarter profit of $4.03 billion.

Novo Nordisk has experienced huge sales of its blockbuster weight-loss drug Wegovy, which led the Danish drugmaker to expand manufacturing capacity and sales outreach with a hiring spree that nearly doubled staff numbers over five years, reported Reuters. However, with slowing sales, there has been a series of layoffs at the drug major.

Will Cost Cutting Reduce Pressing Issues?

The rapid expansion of Novo has come under the lens of investors and management as the drugmaker faces cost pressure and fierce competition from Lilly’s Zepbound and cheaper weight-loss copycat compounds in the United States.

“I don't want to limit myself in terms of where I look for savings, and salaries are a cost item. I will go through everything,” said CEO Maziar Mike Doustdar on August 7, his first day in the job. Two weeks later, on Wednesday, Novo said it had implemented a global hiring freeze for non-critical roles.

When asked to share details on headcount reduction plans, a company spokesperson referred to Doustdar’s comments, reported Reuters.

The increase in hiring over the last five years has resulted in employee costs nearly doubling to $9.9 billion by last year, company filings show.

The higher overhead was not so evident when sales shot up, but Novo’s gross margin has been squeezed this year, reaching its lowest level in two and a half years in the second quarter, reported Reuters.

The stock market has wiped $490 billion off the company's market capitalisation since a peak last year when it was Europe's most valuable firm.

The new CEO, Doustdar, was appointed to drive a turnaround after a bleak outlook for the company this year.

Aspects of FDA Nod to Wegovy You Should Know

Treatment for MASH: Novo Nordisk has announced that the US Food and Drug Administration (FDA) has approved a new indication for Wegovy (semaglutide) injection 2.4 mg, making it the first and only glucagon-like peptide-1 receptor agonist (GLP-1 RA) FDA-approved to treat adults with MASH with moderate to advanced liver scarring (fibrosis), but not with cirrhosis of the liver, in conjunction with a reduced calorie diet and increased physical activity.

This indication is approved based on improvement of MASH and liver scarring (fibrosis). There is an ongoing study to confirm the clinical benefit of Wegovy in adults with MASH, said a company statement.

Chronic Illness: MASH represents a significant health burden in the US, affecting approximately one in 20 people. People living with MASH are often asymptomatic or present with nonspecific symptoms in the early stages, which may result in a delayed diagnosis. Left untreated, MASH can progress to serious and even fatal outcomes, such as cirrhosis, liver cancer, and the need for liver transplant. Among people who are overweight or obese worldwide, one in three also have MASH.

“For far too long, this disease has remained unrecognized, undiagnosed, and often untreated, despite impacting so many people,” said Dave Moore, Executive Vice President of US Operations at Novo Nordisk.

“The FDA’s conditional approval of Wegovy for the treatment of adults with noncirrhotic MASH marks a truly pivotal milestone and a significant step forward for the MASH community and those seeking new options. This builds on the expanding body of evidence demonstrating the clinical benefits of semaglutide across a range of chronic conditions including diabetes, obesity, cardiovascular disease, and chronic kidney disease.”

FDA Nod: The FDA initially approved Wegovy in 2021 with a reduced-calorie meal plan and increased physical activity to help adults with obesity, or some adults with excess weight (overweight) who also have weight-related medical problems, to lose weight and keep the weight off. The indication was expanded in 2022 to include children aged 12 years and older with obesity.

In 2024, Wegovy was approved to reduce the risk of major cardiovascular events such as death, heart attack, or stroke in adults with known heart disease and either obesity or overweight. The FDA has recently granted accelerated approval for Wegovy for a new patient population to treat adults with MASH with moderate to advanced liver scarring (fibrosis), but not with cirrhosis of the liver. In February 2025, Novo Nordisk also filed for regulatory approval in the EU, followed by a regulatory submission in Japan in May 2025.

Employee costs nearly doubled to $9.9 billion over five years as Novo Nordisk expanded manufacturing and sales to support Wegovy’s growth.

Inputs from Saqib Malik

Editing by David Ryder