Teva and the Histadrut labor federation agreed on Tuesday to delay the planned firing of some 800 Israeli employees at the pharmaceutical giant. The decision followed a public uproar over the decision to fire employees in Israel by a company that received some NIS 12 billion in tax breaks from the Israeli government over the past five years.
“There is no connection whatsoever between the question of our taxes and the question of how we work with our workers,” Teva CEO Jeremy Levine told reporters on Tuesday. The layoffs are part of a restructuring plan Teva is pursuing worldwide, which is slated to see several thousand employees laid off around the world.
Levine and Histadrut chief Ofer Eini met Tuesday afternoon, and at the meeting’s end announced in a press conference that the layoffs were frozen for the time being.
“We’ve reached agreement according to which there won’t be any firing of employees in Israel except by agreement” with labor unions, Eini said.
“There will definitely be a reshaking of this company,” Levine affirmed, but added, “We will do that in partnership.”
The public criticism that followed the announcement of the layoffs earlier this week focused on the tax breaks granted to Israel’s largest companies. According to a State Comptroller report publicized on Tuesday, the state has given large corporations NIS 5-6 billion ($1.4-1.7 billion) in tax breaks annually in each of the last five years.
Speaking to Channel 2 News on Tuesday night, Finance Minister Yair Lapid expressed satisfaction over the new agreement with Teva, arguing that a solution could be found that might remove the need for layoffs. “About seven percent of the company leaves every year anyway. This company has 47,000 employees.”
By carefully managing its natural turnover, Teva could gain the financial benefits of the layoffs without directly firing any employees, he suggested.
Lapid also criticized the tax breaks.
“Previous governments legislated these benefits and made it difficult to change them. We already raised their taxes in the current budget,” he said.
“If the [tax breaks] bring increased employment and attract companies from around the world, then they’re a good thing. If we don’t even get that,” he concluded, they should be reexamined.
“We’re working on it,” he promised. “This is why I went into politics.”
Meanwhile, in a video posted to his YouTube page (video is in Hebrew), Economy and Trade Minister Naftali Bennett was the lone voice arguing against the criticism of the tax breaks being offered to attract large companies to Israel.
“Today we are competing for the hearts of the large corporations,” he explained in the video.
Such companies are offered even larger tax breaks by other countries. By drawing them to Israel, he explained, the country benefited from increased employment, including income taxes paid by employees, and the companies’ hiring of services ranging from cleaning to catering.
“If we don’t offer the tax breaks, we won’t get that whole package,” he concluded. “And what will we get in [corporate] income tax then? Nothing.”