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Novo Nordisk was Europe's most valuable company last year

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Share price has since lost more than $400 billion

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Danish economy still outpaces much of the euro zone

By Soren Jeppesen and Jacob Gronholt-Pedersen

KALUNDBORG, Denmark, Sept 25 (Reuters) - In Denmark's

seaside town of Kalundborg, also known as "Novo Town", therapist

Heidi Thron Rune has learnt to live with the noise of building

work as new facilities take shape to meet demand for Novo

Nordisk's Wegovy weight-loss drug.

What is less familiar is the worry that has taken hold as

the pharmaceutical company that has become central to the Danish

economy readies to cut some 5,000 jobs in its home market.

"I think everyone is just holding their breath,"

Kalundborg's Deputy Mayor Tina Beck-Nilsson told Reuters at a

cafe in the town centre overlooking the harbour front.

Wegovy, launched in 2021, made Novo Nordisk

Europe's most valuable company last year.

Since then, fierce competition in the United States from

rival Eli Lilly ( LLY ), and a growing number of copycats have

slowed Wegovy sales, and Novo Nordisk's share price has plunged

by more than $400 billion.

"We don't know yet how it's going to affect us here in

Kalundborg," Beck-Nilsson added, noting pressure on the housing

market as owners have turned their houses into hotels for

construction workers. "What I'll be worried about is that when

the Novo building period is over, what happens, will these

become ghost houses?"

A MAJOR ADJUSTMENT AFTER RAPID GROWTH

Novo Nordisk remains a pillar of Denmark's economy that

still outpaces much of the euro zone, but the end of its rapid

growth has weighed. At its peak, Novo's market value exceeded

Denmark's entire economic output.

The central bank on Wednesday cut its growth forecasts for

2025-2027, citing U.S. tariffs as well as weaker pharmaceutical

sector growth. It expects growth of 2% this year versus its

previous March forecast of 3.6%.

Novo's year has been marked by stalling sales, profit

warnings and a change of CEO. It also plans to lay off some

9,000 people globally, more than half of them in Denmark.

In comments to Reuters, it declined to specify the impact on

individual sites, including Kalundborg.

It said its restructuring would simplify operations and

speed up decision-making, while allowing the reallocation of

resources towards opportunities for growth in treating diabetes

and obesity.

Tore Stramer, chief economist at the Danish Chamber of

Commerce, said Novo would continue to drive growth, and that the

job cuts - taking Novo back to 2024 staffing levels after a

hiring spree - could be absorbed.

"This is a major adjustment, but it comes after a period

where Novo Nordisk has otherwise had strong employment growth,"

Stramer said.

PEOPLE ARE IN 'WAIT-AND-SEE' MODE

Kalundborg is the core of Novo Nordisk's production empire,

which employs some 5,500 people in a town of 16,500, produces

half the world's insulin and serves as a hub for semaglutide,

the active ingredient in Wegovy and sister diabetes drug

Ozempic.

Between 2021 and 2024, Novo invested nearly $10 billion to

expand production in Kalundborg, promising an additional 1,250

jobs. Salaries outpaced the Danish average, and restaurants,

cafes, and wine bars sprang up.

Local house prices also spiked higher in a market that has

now slowed.

"Quite a few people in Kalundborg are in a wait-and-see mode

in relation to Novo's layoffs," local real estate agent Thomas

Ziegler Jensen said in his office in central Kalundborg.

Local worker unions also said that registrations had risen,

reflecting job uncertainty.

"For a country the size of Denmark, it is of course a very

large cut," said Las Olsen, chief economist at Danske Bank,

adding that 5,000 jobs corresponded to just under 0.2% of the

country's total employment.

He downplayed, however, the risk of a "Nokia moment", a

reference to the rise and fall of the Finnish mobile phone

maker.

"We do not see any signs of Novo Nordisk undermining the

competitive ability in the rest of the economy," he said.

The government has also dismissed those concerns and the

country's other major companies include Lego, Carlsberg, and

shipping giant Maersk.

NOVO IN KALUNDBORG TO STAY, SAYS MAYOR

For some in Kalundborg, a less frantic pace has benefits.

"I think if Novo stops hiring for a short while, some of the

other companies in our town will be happy because we are short

of skilled labour," Mayor Martin Damm said. He also predicted

the impact would be short-term.

"Right now, Novo is challenged, but over time, they will

increase their presence in Kalundborg," Damm added. "They are

building new factories, and when they are finished, I don't

think they will leave them empty."

Ask Aaberg, 22, who moved to Kalundborg to study mechanical

engineering last year, said he was hopeful it would become

easier to find somewhere affordable to live.

"In a way, you are up against Novo when you are looking for

housing," he said.

Meanwhile, therapist Rune is looking forward to peace and

quiet.

"They don't even take Saturday off. It takes a toll on my

body," she said during a brief pause in the sound of drilling

that starts at 7 a.m. each morning.