Prime Minister Benjamin Netanyahu told the head of Israel’s largest labor union Thursday evening that he will try to prevent the closure of Teva Pharmaceutical Industries Ltd’s Jerusalem factory, after the company announced it would be slashing a quarter of its global workforce including some 1,700 Israeli jobs.
Speaking with Histadrut labor federation chairman Avi Nissenkorn, Netanyahu said he would work to limit the damage to Teva employees and prevent the closure of the Jerusalem factory where the majority of the pharmaceutical company’s Israeli workforce is based.
Netanyahu said he plans to meet next week with Teva CEO Kare Schultz in order to discuss the issue, according to a readout of the conversation with Nissenkorn.
Finance Minister Moshe Kahlon said that he too would be meeting with Schultz in order to “minimize the scope of the layoffs.”
“I expect the company, which has for many years been a symbol of Israeli international success, to a make particular effort to limit the damage to Israeli employees,” Kahlon said in a statement. “The Israeli government will use all the tools at its disposal in order to help anyone who finds himself without work.”
The company said the 1,700 layoffs in Israel would be completed by the end of 2019, according to a letter sent to Teva’s Israeli employees. The restructuring will see the closure of the Jerusalem manufacturing plant by the end of 2019 and some of the research and development activity in Israel scaled back. The company will also seek to sell off its global logistics center in Shoham and its plant in Kiryat Shmona.
In a letter to Netanyahu sent earlier Thursday, Schultz apologized in the name of the drug-maker’s management for the situation the company is facing today.
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,” he added.
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 Israeli tax breaks since 2006 and must therefore “honor the Israeli people who have helped it,” Nissenkorn, the national labor union chief, said on Wednesday.