New Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) CEO Kare Schultz is set to wield the axe with a new streamlining plan that will include over 1,000 layoffs in Israel out of a total workforce of 6,000 employees in Israel, sources inform "Globes." This latest plan follows several hundred layoffs earlier this year as part of 7,000 layoffs worldwide.
The new streamlining plan will involve the company shedding an additional 20% of its workforce worldwide with most dismissals expected in the US and Europe.
Before all the layoffs, Teva had 60,000 employees worldwide of which 15,000 came with the acquisition of Activis - an acquisition that provides plenty of scope for layoffs as part of integrating the companies. Teva is also naturally reducing its workforce by selling assets such as its women's health division.
Schultz prepared the ground for further layoffs in a brief statement to journalists in the conference call following the publication of Teva's disastrous third quarter results earlier this month. He said “I recognize the significant debt burden that Teva is currently under, and it will be an absolute priority for me that we stabilize the company’s operating profit and cash flow in order to improve our financial profile.”
Among the big name casualties in the latest round of layoffs is expected to be Teva's Chief Scientific Officer Dr. Michael Hayden. Hayden has recorded some successes in his attempts to find innovative drugs although he has failed to produce a blockbuster on the scale of multiple sclerosis Copaxone, which has seen its patent expire.
It is believed that Schultz, with his background in innovative branded drugs, has a replacement for Hayden in mind.
Teva said, "The company does not respond to rumors."
MK Itzik Shmuli (Zionist Union), a member of the Knesset Labor Committee said, "Teva teaches Israeli society a lesson in greed. How can a company receive NIS 6 billion in tax breaks from the State and in exchange fire hundreds of its workers? A crisis of this scale requires cooperation and agreements with the employees and no unilateral and coercive actions."
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2017
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