Israeli drug manufacturing giant Teva Pharmaceutical Industries is reportedly expected to fire up to 1,700 workers in the coming months as part of a streamlining plan aimed at countering poor financial results.
The plan could see up to 25 percent slashed from the 6,860-member local workforce, and an overall cutback of 20% from its total global employee numbers of around 57,000, the economic daily Calcalist reported Thursday. Most of the international firings are expected to be in the US rather than in the company’s European sites, the report said.
Administration executives are working with regional managers in Israel and US on the plan. Letters summoning employees to layoff hearings are to be sent out in the coming days and will continue during the coming weeks, the report said.
The plan follows the introduction of new CEO Kåre Schultz, who took over on November 1. Shultz, as CEO of Danish company Lundbeck, fired 17% of the workforce after taking over in 2015.
Sources in Teva told Hadashot news (formerly Channel 2) that the company doesn’t respond to “rumors,” yet noted “there is an intention to put into practice a streamlining plan, but there is not yet an agreed plan and its extent is unknown.”
Three weeks ago Teva published quarterly figures that showed a sharp drop in profits, a decline in orders and a greatly reduce forecast for the rest of the year.
Its New York-traded shares dove some 68% in the past 12 months as the company struggled to find strategic direction.
On November 2 Teva cut its sales and profit forecasts for 2017, amid greater competition in its generics business and for its flagship branded drug for multiple sclerosis, Copaxone.
The drugmaker reported a net profit of $530 million in the third quarter, compared to $348 million in the same period a year earlier. Revenues for the quarter rose 1% to $5.6 billion, the company said in a statement. The profit was below analyst estimates.
It also cut its revenues outlook for the year, to $22.2 billion-$22.3 billion, from a previous forecast of $22.8 billion-$23.2 billion, due to an earlier than expected launch of generic competition to Copaxone 40 milligram for multiple sclerosis.
The FDA approved a generic version of Teva’s flagship Copaxone in the 40mg dosage last month, opening the door for copycat versions of its medication. And a UK court ruled in favor of a challenge to the patent of Copaxone. Teva had not expected competition for the 40mg version of the drug this year.