COPENHAGEN - Novo Nordisk, the world's top maker of diabetes drugs, said on Tuesday it will lay off 400 staff in Denmark and China in order to divert funding towards investment in biological and technological innovation.

The firm, which employs more than 42,000 people in 79 countries, has seen growth slow due to pricing pressures in the United States, from where it sources about half its revenue.

"This is not a cost-cutting exercise," Novo's chief science officer Mads Krogsgaard Thomsen said in an interview, noting that his research and development budget will be larger in 2019 than this year.

"Our analysis shows that we have a surplus of manual labour and are lacking competences in the digital sphere, informatics, data science, artificial intelligence and automations."

The company plans to increase investment in innovation within both its core therapy areas and new ones.

As part of this it will establish four new "biotech-like units" this year in Denmark, the United States and the United Kingdom to pursue innovation in areas like stem-cell research.

Novo Nordisk will also increase its investment in automation and digital capabilities, including machine learning and artificial intelligence, it said.

It announced 1,000 job cuts in 2016 as competition among insulin producers increased and prices were squeezed by pharmacy benefit managers (PBMs) who administer drug programs for employers and health plans.

Novo Nordisk said in May that new U.S. legislation aimed at reining in high drug prices would cut its 2019 sales by 1-2 percent.

Shares in Novo Nordisk were trading 0.7 percent higher at 1012 GMT.

(Reporting by Jacob Gronholt-Pedersen and Teis Jensen; Editing by Kirsten Donovan and Jan Harvey) ((jacob.pedersen@thomsonreuters.com; +45 3396 9673; Reuters Messaging: jacob.pedersen.thomsonreuters.com@reuters.net))