Teva Pharmaceuticals, having gotten through the most difficult year in its history, announced that it is has begun consultations with local unions regarding plans to lay off about 350 members of its 7,000-strong workforce in Israel.
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“Israel, and the Negev in particular, is important to Teva, and our operations here will continue to constitute a significant part of the country,” said Yitzhak Peterberg, Teva’s interim president and CEO. “Still, we are committed to doing everything necessary to ensure that our sites in Israel will be competitive, efficient and sustainable. Teva will continue to invest in Israel – and in production sites in particular – in operations that will strengthen our competitiveness at the global level.”
David Lustig, senior VO of Teva Israel Operations, added: “Teva’s largest production center is in Israel, responsible for manufacturing strategic products for the present and future. We invested many resources in recent years in positioning the site in Kfar Saba as one of the company’s most significant investment centers, in which some 350 launches are planned for the coming five years. Likewise, we will continue investing in infrastructure, development and accumulating the necessary knowledge for production in Teva’s future core fields.”
A spokesman for the Histadrut labor federation, Yaniv Levy, commented: “We will not agree to any unilateral step in which Teva corporation workers are fired. We expect company management to act responsibly and not to bring Teva Israel factories into the line of conflicts that will disrupt labor relations.”
Teva went through a difficult stretch last year in the generic drug field after losing its patent for Copaxone, its flagship proprietary multiple sclerosis drug, and in the wake of a host of major acquisitions that embroiled the company in substantial debts and legal battles.
Reeling from these blows, the company announced in February the departure of CEO Erez Vigodman. The company has yet to find a permanent replacement. The company also announced in late April the planned departure of Eyal Desheh, Teva’s longtime group executive vice president and CFO.
Shares of Teva, still the largest company traded on the Tel Aviv Stock Exchange, have tumbled 55 percent since the summer of 2015. The fall in the company’s value has gone hand-in-hand with criticism of the business decisions management has recently taken – among them the acquisition of Actavis Generics, the generic division of Allergen, for the enormous sum of $40 billion.
This deal obliged Teva to issue bonds to fund it, and entangled the company in a debt it will have a hard time repaying. The company drew further sharp criticism following the deal in which it acquired Mexican drug company Rimsa, after which Teva accused the sellers of fraud.