A building in Jerusalem belonging to generic drug producer Teva.
(photo credit: REUTERS/BAZ RATNER)
Teva Pharmaceuticals, the once soaring yet now battered Israeli drugmaker, is considering layoffs of some 10,000 workers, according to initial reports by Bloomberg. It is unclear how many workers in Israel would be affected.
Last month, the debt-laden company was reportedly considering firing 20% to 25% of its 6,860 workers in Israel. The company was also considering whether to send termination letters to 4,000 people worldwide.
The new reported layoff figure is much higher than analysts had previously estimated, and the final number could range between 5,000 and 10,000 jobs lost. A Teva representative declined to comment on the matter. The company employed some 57,000 worldwide as of last year.
The Petah Tikva-based firm seeks to reduce its expenses by $1.5 billion to $2b. in the next two years, Bloomberg reported, with slightly under half of the cuts hitting its research-and-development teams.
In response to the pending layoffs, Teva’s stock leaped to its highest point since October.
CEO Kare Schultz, who took up the post in November, is grappling with heightened competition against Teva’s blockbuster multiple sclerosis drug Copaxone. In addition, US regulations that open up generic drugs to greater competition have led to rapidly falling prices, hitting the company hard.
Teva also faces a heavy debt load of $35b. that followed its ill-advised acquisition of Allergan’s generic unit in 2016. For months now, the company has warned about impending layoffs and further cost-cutting.
The company may also announce the closure of several factories, as well as cutting administrative costs and reducing operational expenses, in response to dismal earnings in 2017. Schultz is promising to publish a detailed plan in mid-December for Teva’s recovery, Bloomberg reports.
Streamlining and layoffs aren’t new to Schultz, who after taking the helm at Danish pharmaceutical company H. Lundbeck A/S, laid off some 17% of the workforce.
In response, the Danish media nicknamed the CEO “hardcore,” according to Reuters.