Are Novo Nordisk layoffs, FDA scrutiny of Hims & Hers, and UnitedHealth profit squeeze reshaping the healthcare sector?

Why did Novo Nordisk announce massive job cuts and what does this mean for its global obesity drug strategy?

Novo Nordisk (CPH: NOVO-B), Europe’s second most valuable listed company, jolted the healthcare sector this week with the announcement of 9,000 job cuts, representing around 11 percent of its global workforce. The layoffs include more than 5,000 positions in Denmark, striking at the heart of what locals call “Novo Town,” where entire communities are built around the Danish pharma major. The company explained that the decision was aimed at simplifying operations, freeing up nearly DKK 8 billion ($1.25 billion) in annual cost savings by 2026, and redirecting resources toward obesity and diabetes innovation.

The restructuring highlights the growing competitive pressures in the obesity drug market, which Novo Nordisk currently leads with Wegovy and Ozempic. Chinese firm Innovent recently launched Xinermei, a GLP-1 rival that undercut Novo’s pricing in China, signaling that the world’s largest pharma market could become less reliable for Novo’s blockbuster franchise. Eli Lilly, with its Mounjaro and Zepbound launches, has also taken significant market share in the United States. Analysts have noted that patent expirations beginning in 2026 will only intensify the fight, leaving Novo with little room for inefficiency.

Novo’s new CEO Maziar Mike Doustdar, who took over in August 2025, now faces the dual challenge of restoring investor confidence while steering a cultural transformation. He is the first non-Dane to run the company, marking a significant leadership shift in its century-long history.

How is Novo Nordisk stock performing after the layoffs and revised profit guidance?

Shares of Novo Nordisk (CPH: NOVO-B) slipped nearly 4 percent in Copenhagen after the job cuts were announced and the company lowered its profit growth outlook from a range of 10–16 percent to 4–10 percent. Investors interpreted the guidance as an acknowledgment that the firm’s cost base had become too heavy amid slowing revenue momentum. Institutional flows showed Danish pension funds trimming exposure while international long-only funds maintained positions, betting on the durability of the GLP-1 franchise.

Sentiment remains mixed. Bulls argue that the oral version of semaglutide, showing up to 16.6 percent weight loss in clinical studies, could unlock a second growth wave if regulatory approvals move quickly. Novo also released new real-world data suggesting Ozempic lowers cardiovascular events by 23 percent compared to dulaglutide, strengthening its argument for reimbursement expansion. Yet skeptics warn that the coming wave of biosimilars and aggressive Asian competitors could compress margins far faster than management anticipates.

For now, analysts have adopted a “Hold” stance, with price targets adjusted slightly downward. The consensus is that Novo must demonstrate execution discipline during its restructuring if it is to maintain its commanding position in obesity care.

Why is Hims & Hers under FDA scrutiny and how are investors reacting to the telehealth company’s growth push?

Hims & Hers Health Inc. (NYSE: HIMS), the U.S.-based telehealth platform popular with millennials, faced heightened regulatory pressure after the Food and Drug Administration issued warning letters regarding its advertising practices. Regulators flagged the company’s Super Bowl commercial for its GLP-1 weight loss offerings, saying the ad emphasized benefits without adequately disclosing side effects.

The development underscores a major risk for telehealth firms that rely heavily on direct-to-consumer advertising. Growth has been impressive, with Hims & Hers recently promoting access to GLP-1 prescriptions at a starting price point of $99 per month for U.S. “community heroes,” including teachers and first responders. Management has publicly targeted a $6.5 billion market capitalization in the medium term, leveraging weight management, mental health, and men’s health to scale revenues.

Despite the regulatory headwinds, Hims & Hers stock (NYSE: HIMS) has been relatively resilient, dipping just 2 percent this week. Retail investors remain bullish on the affordability and accessibility of its care model, while institutional investors are more cautious. Flows showed some hedge funds lightening positions after the FDA news, but long-only tech and healthcare funds have maintained allocations, betting that the market’s demand for GLP-1 access outweighs near-term compliance risks.

The company also expanded into men’s health with a new low-testosterone treatment line, further diversifying its portfolio. Analysts believe that the breadth of offerings may help offset regulatory pressures if Hims & Hers can tighten compliance and avoid further FDA escalations.

What challenges is UnitedHealth facing with rising costs and what does this mean for its future profitability?

UnitedHealth Group Incorporated (NYSE: UNH), the largest U.S. health insurer, has struggled to maintain investor confidence as rising medical costs eat into margins. Its most recent quarterly earnings fell short of Wall Street estimates, with management citing higher-than-expected claims across Medicare Advantage and commercial plans. The company also issued conservative guidance for 2025, signaling that cost inflation is not abating.

The stock (NYSE: UNH) fell 3 percent during the week, underperforming broader healthcare indices. Analysts at major brokerages trimmed earnings-per-share estimates by 5–7 percent for fiscal year 2025, warning that profit growth could remain sluggish until medical cost trends normalize. Institutional flows showed outflows from passive index funds but steady inflows into defensive healthcare ETFs, indicating investors still see UnitedHealth as a core holding but are adjusting weightings to reflect cost pressures.

Leadership turnover has added another layer of uncertainty. CEO Andrew Witty stepped down earlier this year for personal reasons, leaving a transitional leadership structure in place. While Witty remains as an adviser, analysts see the lack of clarity around succession as a strategic overhang.

Adding to the pressure, UnitedHealth continues to face reputational fallout from regulatory probes into Medicare billing practices, as well as operational scars from the 2025 cyberattack on its Change Healthcare subsidiary. That breach disrupted claims processing nationwide and underscored the company’s exposure to cybersecurity risks at a time when digitization in healthcare is accelerating.

How do these three healthcare stories fit into the broader industry outlook?

The developments at Novo Nordisk, Hims & Hers, and UnitedHealth together tell a broader story of an industry in flux. Pharmaceutical majors are being forced to restructure to remain competitive in obesity and metabolic disease markets. Digital health platforms are rapidly scaling but must learn to navigate the regulatory guardrails that come with high consumer visibility. Health insurers, meanwhile, are caught in the crossfire of rising utilization and cost inflation, testing their ability to balance profitability with public and regulatory scrutiny.

Historically, healthcare has been seen as a defensive sector, offering stability in volatile markets. But these stories highlight that even within defensive industries, innovation cycles, regulatory oversight, and cost structures can drive volatility. Investors seeking exposure to healthcare must now weigh the resilience of incumbents against the disruptive potential of digital platforms and the fast-changing science behind obesity and metabolic therapies.

What should investors watch in the coming weeks for Novo Nordisk, Hims & Hers, and UnitedHealth?

For Novo Nordisk, the key will be investor reaction to its upcoming third-quarter earnings. Analysts expect management to provide more detail on the financial impact of job cuts and how cost savings will be redeployed into obesity pipeline investments. Any updates on oral semaglutide’s regulatory pathway could also act as a catalyst for the stock.

Hims & Hers will need to demonstrate regulatory discipline while maintaining growth momentum. The company’s next earnings call is expected to reveal subscriber growth rates in weight loss and mental health verticals. A strong update could reassure investors that FDA scrutiny will not derail growth.

UnitedHealth faces the toughest near-term challenge, as its cost structure is largely tied to macro healthcare trends. Investors will watch closely for signs that claims costs are moderating. The insurer’s succession planning and cybersecurity safeguards will also remain under the spotlight, given recent events.

Together, these updates will shape market sentiment toward the healthcare sector heading into the final quarter of 2025. While Novo Nordisk, Hims & Hers, and UnitedHealth operate in very different corners of the healthcare ecosystem, their recent developments underline a common reality: healthcare companies are no longer immune to disruptive forces, whether they come from competition, regulation, or costs.