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Teva to cut up to 25% of Israel workforce
[TEL AVIV] Teva Pharmaceutical Industries Ltd, the debt-ridden drugmaker, plans to fire as much as 25 per cent of its Israeli workforce, according to a local business daily.
The world's largest manufacturer of generic medicines will begin the dismissals in coming days, Calcalist reported Thursday, without saying how it got the information. Teva also will let go more than 10 per cent of its US-based workers and some in Europe, according to Calcalist. Michael Hayden, head of global research and development, is expected to leave the company, the report said.
Eliran Levy, a Teva spokesman, declined to comment. Yaniv Levy, a spokesman for Histadrut, Israel's national labor union, said the union had been told "that there is no plan or numbers at this stage, and every step, if and when they are taken, will be done through discussion." Teva shares were up 3.5 per cent to 49.38 shekels, their highest level in a month, as of 9.48 am Thursday in Tel Aviv. The company's U.S. shares have plunged 63 per cent this year, worst among 138 traded companies on the MSCI World Health Index.
Teva faces tough choices to stem its dramatic slide. The company lost its monopoly on its best-selling product last month and is racing to sell off assets to pay back US$34.7 billion in debt, a figure that dwarfs the company's market value. Analysts expect the company to announce a cost-cutting plan, but reducing its workforce in Israel - where Teva was founded and is headquartered - has proven historically difficult. When Teva announced in August that it would lay off 350 Israeli workers, the union responded with labor disputes and negotiated the final number down to 230.
Earlier this month, Kare Schultz, the Israeli drugmaker's new chief executive officer, pledged to investors that he would "improve financial performance, and re-position Teva operationally and financially."