Danish insulin maker Novo Nordisk plans to lay off about 1,000 employees worldwide – but those job cuts will bypass Johnston County, where the company ranks among the largest employers.
Novo spokeswoman Marisa Sharkey said Thursday that no layoffs are planned for the company’s manufacturing complex in Clayton, where Novo employs 980 workers.
“We’re committed to ensuring the U.S. is supplied with our diabetes and obesity medicines,” Sharkey wrote in an e-mail. “This starts with our operations in Clayton.”
About half of the job cuts, which are part of a broader cost-cutting effort, will take place in Denmark. The company attributed the cuts to “a challenging competitive market,” especially in the United States, its largest market.
Novo is spending $1.8 billion to build a second manufacturing plant in Clayton – the largest single manufacturing investment ever in North Carolina. Novo broke ground on the plant in the spring.
“Our Clayton expansion remains underway and we are still aiming for the site to be operational in 2020,” Sharkey said.
Novo has committed to creating another 691 jobs over five years in conjunction with the expansion. If it hits its investment and job targets, the company would receive a $15.9 million state Job Development Investment Grant. In addition, Johnston County would refund $94 million in property taxes over 15 years.
The cost-cutting effort underscores the increasingly difficult operating environment in the U.S. as payers become more selective about the drugs included in coverage plans for their clients and cheaper generic medicines force Novo to cut prices or lose market share, Bloomberg News reported.
Last month Novo, which has 42,300 workers worldwide, acknowledged losing a “sizable” contract for its top-selling insulin, NovoLog.
CEO Lars Rebien Soerensen told Bloomberg TV that Novo is examining whether to proceed with developing certain experimental drugs.
“The next line of products have to have an even greater height of innovation, which means those that do not have that height of innovation will have to be culled,” he said.
“We don’t believe we are cutting into the muscle,” Soerensen also noted. “We are adding resources to the most promising projects.”
Novo said that the job cuts, and the cost associated with them, don’t change the company’s financial outlook.
Bloomberg News contributed to this story.