Teva Pharmaceutical Industries is anticipated to lay off 20-25 percent of its Israeli workforce In the coming weeks, as per financial news website Calcalist. On Thursday, November 23rd, it was also reported that Teva, the world’s largest generic drugmaker, would cut thousands of jobs in the United States. Israel’s largest company, currently employs 6,860 workers in Israel, and 10,000 employees in the United States. Teva’s new CEO, Kare Schultz, is figuring out the details together with regional managers in Israel and the U.S. As per Reuters, the company’s chief scientific officer and president of research and development, Michael Hayden may be among those ousted. The company has also been selling off its assets to manage its debt payments.
Israel’s labor federation, the Histadrut, was quick to comment saying it would not allow Teva to act unilaterally. “Any efficiency measures, if and when they arise, will be done through negotiations and with the agreement of the Histadrut and the labor unions,” said Yaniv Levi, spokeman for Histadrut .“Lay-offs are the last resort.” Teva has yet to comment.
The pharmaceutical giant has been plagued with financial woes over the past year. Traded on the NYSE as well as the TASE, Teva’s current market cap is $11.5 billion. Following its acquisition of $40.5 billion acquisition of Actavis , Allergan’s generic drug business, it has accrued a total of nearly $35 billion in debt. Of late, the stock price has been falling partly due to lower than expected quarterly financials released earlier in the month, which is greatly attributed to expiring drug patents. Fitch Ratings downgraded Teva’s bonds to junk this month. Standard & Poor’s has already indicated that it might do the same.
“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,” Schultz said, after releasing weak financial statements, early in November.
By Ellen Cans