Teva To Cut 14000 Jobs, Suspend Dividend

Teva To Cut 14000 Jobs, Suspend Dividend

Some higher-level workers will also get the boot; as part of the new, pared-down organizational structure Teva announced a couple of weeks back, the company will be "reducing layers of management", it said.

Teva Pharmaceutical will reveal a restructuring plan on Thursday which includes slashing about half of its Israeli workforce, as well as closing a research and development center in Netanya, Israel, according to people familiar with the matter.

The company plans to consolidate seven US offices - not including the Gurnee site, which is a distribution center - into one main campus whose location has not been decided, according to a statement provided by Hollon. "These are decisions that I do not take lightly, but are necessary to ensure Teva's future, and we will implement these changes with fairness and respect for our colleagues all over the world", Schultz said in a press release.

Teva's stock has skidded almost 60 percent this year.

The ailing drug-maker is saddled with debt and has been suffering from price cuts in its generics business along with sooner-than-expected competition to its flagship branded drug, Copaxone, for multiple sclerosis.

The once industry giant, yet now debt-laden colossus, faces steadily dropping generic drug prices in the United States, as Food and Drug Administration regulators are making it easier for competitors to enter the market. While small-scale demonstrations took place outside Teva's various facilities today, larger demonstrations have been scheduled for Sunday, which is a regular workday in Israel, when all of Teva's employees in Israel will go on a one-day strike. That's a large chunk of cash, considering that it estimates its total cost base for this year will check in at $16.1 billion. It will immediately suspend dividends on ordinary shares, and cancel bonus for 2017, due to fact that its financial results are significantly below original guidance for the year.

"Making workforce reductions of this magnitude is hard, and we do not take them lightly", Schultz said. "However, there is no alternative to these drastic steps in the current situation".


"The cuts will stabilize Teva in the near term", analyst Ronny Gal at Sanford C. Bernstein said in a client note. "If we do well, then in five years, it's going to look great", Schultz told analysts in a conference call.

Economy Minister Eli Cohen said Teva's employees should not pay for the company's failed investments overseas. It said air and seaports, public transportation, insurance companies, banks, government offices and health clinics would close throughout the morning in solidarity with the workers - which could bring the nation to a standstill.

Israeli Prime Minister Benjamin Netanyahu's office said he called Schultz ahead of the announcement to express his concerns.

Netanyahu also spoke to Histadrut leader Avi Nissenkorn and also pledged to work to minimize the impact on local workers.

In September, Teva announced the appointment of Denmark-born Schultz, at the time the CEO of Copenhagen-based pharmaceutical company H. Lundbeck A/S. Teva's planned hiring was leaked and AstraZeneca managed to retain Mr. Soriot by offering a more attractive compensation package.

"I do so as a reflection of my commitment to Israel", he said. Published reports said that Teva will close and sell its Migada disposable medical equipment plant in Kiryat Shmona and cut 500 workers in the Petah Tikva headquarters office.

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