Teva Gives Layoffs Reprieve to Some Jerusalem Plant Workers

Although plans still call for 180 of the roughly 1,000 workers to be laid off at the beginning of the year, the remaining staff won't be terminated until the end of 2019

Workers protest outside the Teva Pharmaceutical Industries factory in Jerusalem, Sunday, Dec. 17, 2017
Ariel Schalit / AP

Employees of Teva Pharmaceutical Industries’ two plants in Jerusalem were given a reprieve of sorts when it comes to the financially troubled company’s plans to shut down the facilities, one of which produces pills and the other inhalers. Originally some of the employees had been due to be let go in early 2018, with others following in the middle and the end of the year. Although plans still call for 180 of the roughly 1,000 workers at the two plants to be laid off at the beginning of the year, the remaining staff will now not be terminated until the end of 2019.

Teva is still determined to close the two facilities. About 750 are employed at the pill production plant, which exports to the United States. The inhaler plant, which employs about 250 has faced competition from a robotic facility that Teva owes in Ireland.

Last week it was reported that the Economy and Industry Ministry was in talks over a possible 70 million shekel ($20 million) government grant for plants that would take in about 250 of the laid-off Teva Jerusalem workforce. The contacts have included discussions with the Jerusalem software firm Lightricks about employing 100 workers in exchange for a 34 million shekel grant. Rafael Advanced Defense Systems may hire 26 employees and receive 12 million shekels in return from the government. Jerusalem-based Rafah Laboratories is to receive 12.5 million if it hires 15 employees and Dexcel Pharmaceuticals, which has a plant in Jerusalem, is to receive 6 million shekels for employing 25 staff people. Other firms would be slated to collectively receive 5 million shekels for employing 80 Teva employees.

All told, the Industry Ministry has approved an investment package for Jerusalem of more than 200 million shekels in response to the planned Teva layoffs, including the immediate injection of 70 million shekels for the plants that are to take in 250 Teva employees.

Two weeks ago, Teva’s new CEO, Kare Schultz, rejected a request from Prime Minister Benjamin Netanyahu to head off the closure of the two plants in Jerusalem and instead close plants abroad. At a meeting with top government officials, Schultz told Netanyahu and Finance Minister Moshe Kahlon that the business realities that the Israeli-based company are facing require immediate and substantial cuts to ensure Teva’s future. Without such steps in the coming months, Schultz said that Teva, which is the world’s largest generic drug company, would face increasing exposure to a takeover.

Schultz reiterated his commitment to maintain Teva’s headquarters in Israel. “I am committed to maintaining a strong presence of R&D, as well as preserving most of our existing manufacturing in Israel in the future,” he said.

Teva has been weighed down by $35 billion in debt it took on to acquire Allergan’s Actavis generic drug business for $40.5 billion last year, a move that coincided with tumbling U.S. prices for generic drugs and the start of competition to Teva’s blockbuster multiple sclerosis drug Copaxone.