Novo Nordisk Layoffs Add Fuel to Denmark’s Economic Anxieties

Article content

Henrik Brabrand, CEO of Albright Partners, which specializes in executive-level recruitment for pharmaceutical makers, said he expects most laid-off Novo workers to find new roles over time, given Denmark’s strong life-science ecosystem and years of investment in startups. But he cautioned that the recovery will be slow, and it will likely take two to four years before most secure new positions.

Article content

In the meantime, he said of layoffs, “the trend we’re seeing now won’t stop.”

Article content

With economic nerves already frayed, that puts heightened focus on Novo’s next moves. The biggest concern is that a further slowdown at Novo — which has warned of negative growth this year — might not be confined to the company itself. Years of expansion have turned the pharmaceutical company into an economic engine in the regions where it operates, meaning that even a modest pullback risks setting off a chain reaction.

Article content

“If activity at Novo declines, it will inevitably spread,” said Helge Pedersen, chief economist at Nordea. “If less production is needed, it affects subcontractors. If there is less investment, it hits contractors. And if activity in a local area decreases, it impacts retail, and so on.”

Article content

Article content

Some of those knock-on effects are already becoming visible. Meyhoff said he’s worked with several Novo suppliers and subcontractors that once hired aggressively to keep up with demand but are now being forced to cut jobs as the drugmaker scales back. “They are really under pressure,” he said.

Article content

During a presentation on earnings and year-ahead outlook, Chief Financial Officer Karsten Munk Knudsen said that most departments within Novo have seen their budgets cut for the year. 

Article content

“Our suppliers should expect that we’re going to spend less,” he added. “We are in a different situation now. With the top line declining, there’s only one way to go.”

Article content

The Danish Society of Engineers, IDA, a union that represents engineers and IT and natural science professionals, said that membership inquiries have risen since Novo announced the layoffs, and not only from its employees.

Article content

“We are seeing more large rounds of layoffs than usual at the moment,” said Malene Matthison-Hansen, who chairs IDA’s employees’ council. “Since Novo is cutting back, some of the companies that supply Novo Nordisk also need to cut back, so there are definitely some ripple effects at the moment.”

Article content

Article content

Some experts point out that there could be a silver lining in the Novo downsizing. Companies that struggled to find workers in the wake of the drugmaker’s aggressive hiring might now have an easier time, said Christin Tuxen, Nordic head of banking for SME business customers at Danske Bank, Denmark’s largest lender.

Article content

Tuxen described how recent layoff rounds across the Nordics have strengthened innovation by putting highly skilled engineers back into the labor market. She also pointed to Finland’s experience after Nokia downsized thousands of workers. That freed up a pool of talent that went on to found new firms and create a broader technology ecosystem in the country.

Article content

In fact, Novo has received “big thank-you’s from many of the other companies” because it had “finally released some workforce back into the market,” Mike Doustdar, the drugmaker’s CEO, said in an interview.

Article content

The Danish government is watching these developments closely. While it has played down the immediate impact of the Novo cuts, arguing that the country’s labor market remains strong, it concedes that they will drag on employment growth. The redundancies are expected to show up in unemployment figures in the first half of 2026, according to the economy ministry, after notice periods expire.