In a letter to Prime Minister Benjamin Netanyahu, Kare Schultz, the new CEO of Teva Pharmaceutical Industries Ltd., apologized in the name of the drug-maker’s previous management for the situation the company is facing today.
On Thursday the company said it would be slashing a quarter of its global workforce, or some 14,000 people, over a period of two years. 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.
“We, the board of directors and management of the company, wish to assure you that after careful examination of the alternatives, we have no other choice — we must save Teva — and so we will do,” Schultz wrote.
“I am committed to maintaining Teva’s global headquarters in Israel, including my office. I do this as part of my commitment to Israel and with maximum confidence in the potential for our success here in the long term.”
Some 1,700 jobs will be cut from Teva’s Israeli workforce by the end of 2019, the company said. Teva is one of Israel’s biggest employers.
During his 30 years in the pharmaceutical industry, Schultz said, he has “learned to admire” Teva as a leading and unique company in the industry “due to its uncompromising commitment to develop and deliver quality drugs to hundreds of millions of patients every day,” wrote Schultz. “Teva has reached its leading global position thanks to the Israeli spirit that has characterized the company for more than 116 years. The plan announced today by the company is intended first and foremost to realize our common aspiration — to preserve Teva as a strong global company, based in Israel.”
Schultz ended the letter thanking the Israeli government for the “significant support” Teva has received over the years.
The Calcalist financial website reported earlier on Thursday that Prime Minister Benjamin Netanyahu spoke by phone with Schultz and requested he curb as much as possible the damage to Israeli workers and ensure that Teva’s Israeli identity will be preserved.
Teva’s new reorganization plan has already encountered fierce opposition from Israeli politicians, and the powerful Histadrut labor union called for a general strike throughout the country next Sunday morning in anticipation of the layoffs, as details of the plan leaked to the press over the past week. The company received NIS 22 billion (some $6.2 billion) in breaks since 2006, Avi Nissenkorn, chairman of the union, said on Wednesday.