Drug giant Novo Nordisk, which operates a large insulin production plant in Johnston County, says it remains committed to the $1.8 billion expansion underway at the facility.

However, the company has imposed a hiring freeze.

It also announced 1,000 layoffs Thursday but the N.C. operation is not affected, a company spokesperson says.

Asked if cost cuts and layoffs would impact Novo Nordisk’s plans to expand in Clayton, spokesperson Ken Inchausti replied: “No, our Clayton expansion remains underway.”

He also said the company remains committed to the Clayton operation.

“Clayton is our primary manufacturing site for the United States, and a critical hub in our manufacturing network,” Inchausti said in an email interview. “Part of the reason we are making these changes is to help us prioritize for long-term growth and investment, like our expansion underway in Johnston County.”

In March, Novo Nordisk and the addition of some 100 jobs at the Clayton operation. In August 2015, the company said it would add nearly 700 jobs as part of iexpansion plans announced at that time.

Inchausti, who handles U.S. media relations for the Denmark-based company, also said there would be no layoffs in Clayton “at this time.”

“We’re committed to ensuring the U.S. is supplied with our diabetes and obesity medicines,” Inchausti said. “This starts with our operations in Clayton.”

The impact of the cost cutting moves on Clayton “will be minimal,” he added, “because the diabetes pandemic still requires us to supply the U.S. market, which is seeing diabetes increase in prevalence.”

There are more than 29 million diabetics in the U.S., according to the U.S. Centers for Disease Control.

However, there are no job openings at the Clayton plant – and won’t be for the near future.

“We initiated a hiring freeze some time ago just to ensure we were optimizing our efforts,” Inchausti explained. “With our budget review process still ongoing, we’re maintaining the freeze for now.”

Novo Nordisk recently lost a “sizable” contract for a product made in Clayton, the NovoLog, the company’s CEO recently told Bloomberg news. But Inchausti said the contract loss “has not affected our Clayton operations.”:

Why the cuts?

The company cited “a challenging competitive environment, especially in its large US market.”

Most of the cuts will be made in Denmark, where the company is based, according to a statement made Thursday.

“We deeply regret that good colleagues stand to lose their jobs, and it has been a difficult decision to make,” said CEO Lars Rebien Sørensen in the layoff announcement. “However, we have concluded that it is needed in order for us to have a sustainable balance between income and costs. In the current situation, we have to prioritize investments in key product launches that will bring innovation to patients and drive our future growth.”

Sorensen had told Bloomberg about the lost contract in August. The news ignited the largest sell-off of Novo Nordisk stock in more than three years, Bloomberg noted.

The Copenhagen-based company said the layoffs will affect its research and development departments, headquarters staff functions and global commercial organization.

“That they cut hard in R&D poses a risk in the long term, as in whether they can keep momentum going. They are messing with their life-blood which means that there isn’t much fat left to cut off,” Alm. Brand analyst Michael Friis Jorgensen told the Reuters news service.

Novo Nordisk currently employs some 42,300 people in 75 countries and markets its products in more than 180 countries.

Approximately half of Novo Nordisk revenues come from the U.S. Bloomberg noted that “prices have been squeezed by pharmacy benefit managers (PBMs) who administer drug benefits for employers and health plans.”

The Wall Street Journal also reported that a new insulin product called Tresiba in the U.S. faces impending competition from a forthcoming lower-cost “copycat” product from Eli Lilly & Co. Tresiba also competes against Lantus, an insulin product made by Sanofi, the WSJ noted.

Sorensen is leaving the company in January, according to an announcement made earlier this month. Lars Fruergaard Jorgensen, who is now executive vice president and head of corporate development, is to replace him, according to Reuters.

(The Associated Press contributed to this report.)