Flagship 'becoming symbol of the ruin of Israeli industry'

Union calls strike over thousands of expected Teva layoffs

Histadrut says much of country, including airports, will shut down for hours on Sunday morning to protest drugmaker’s plan to firre half of its workforce

An Israeli worker walks by the offices of Israeli pharmaceutical company Teva Industries in Jerusalem, October 11, 2013. (Yonatan Sindel/Flash90)
An Israeli worker walks by the offices of Israeli pharmaceutical company Teva Industries in Jerusalem, October 11, 2013. (Yonatan Sindel/Flash90)

The Histadrut labor union called a general strike throughout the country next Sunday morning over an expected announcement that pharmaceuticals giant Teva would lay off some 3,300 Israeli employees.

The cut to about half of the company’s workforce in Israel comes as part of a massive cost-cutting plan meant to put the once formidable market leader in generics back on its feet.

The mass layoffs are expected to include workers abroad as well, as the troubled drugmaker attempts to recover from financial doldrums.

Avi Nissenkorn, head of the powerful Histadrut union, has demanded government intervention to prevent the layoffs, and said much of the Israeli workforce would strike for several hours Sunday morning in response.

This will include Teva employees, government offices, airports, medical clinics, banks, public transport, the stock exchange and more.

Histadrut chairman Avi Nissenkorn seen at the National Labor Court in Jerusalem on March 26, 2017. (Yonatan Sindel/Flash90)

“Teva, the flagship of industry, is becoming a symbol of the ruin of Israeli industry,” Nissenkorn said.

“It’s unfathomable for Israeli board members to raise their hands… to wipe out Teva in Israel. Thousands of families are dependent on Teva. They’re not sleeping at night… What will they tell their children?”

Once among the country’s largest firms, Teva has seen its fortunes sink in recent years as it has suffered from price cuts in its generics business and sooner-than-expected competition to its flagship branded drug, Copaxone, for multiple sclerosis.

The reports of the expected layoffs and closure of several facilities were met with anger from politicians Wednesday, who said the company owed the state for years of tax cuts and subsidies.

“Teva is giving us all a painful lesson in ungratefulness and greed. After receiving billions of shekels in tax cuts to encourage employment, they push for huge layoffs,” Zionist Union MK Itzik Shmuli said.

Economy Minister Eli Cohen appeared to agree.

“Much of Teva’s success has come thanks to the benefits and tax cuts it received from the state and thanks to the work of Israeli scientists,” he said. “Israeli workers should not pay for failed investments abroad funded by earnings made in Israel.”

Assembly lines in the Teva Medical Factory in Har Hotzvim, Jerusalem, March, 15 2010. (Nati Shohat/Flash90)

Former Labor Party leader Shelly Yachimovich has called on Finance Minister Moshe Kahlon and Nissenkorn to not to stand “idly by” as thousands of workers are sent home, calling on them to take a hard stance on Teva’s management and to make it clear that massive layoffs will not save money for the company but instead cost it even more.

The Knesset’s State Control Committee, headed by Yachimovich, is planning to hold a discussion on Teva’s layoffs, Calcalist reported.

Meretz MK Ilan Gilon called for Teva’s CEOs to return their bonuses to the firm before any layoffs are implemented. “Dedicated workers should not be thrown into the street as if they were crumbs on a tablecloth,” he said, according to Calcalist.

The troubled drugmaker said on Tuesday that Yitzhak Peterburg, who served as the interim chief executive, has resigned from the board, effective immediately.

Kåre Schultz, the newly appointed CEO and president of Teva. (Courtesy)

Teva’s new CEO, Kare Schultz, is expected to announce this week a roadmap detailing how he plans to lead the recovery of the ailing company.

The drugmaker needs to repay debt of some $10 billion over the next 12 months.

As part of the cuts, Calcalist said Wednesday, Teva’s R&D center in Netanya will be shut down, a factory in Neot Hovav will fire most of its workers and the plant in Kiryat Shmona will be sold or shut down. Some 500 workers from the company’s Petah Tikva headquarters will be fired, Calcalist said, citing people familiar with the matter.

Calcalist called the expected layoffs the biggest wave of firings in Israel in the past few years.

Teva, the world’s largest generic drugmaker, employs more than 56,000 workers globally.

The cost-cutting steps are part of a global reorganization Teva’s Shultz is overseeing. Bloomberg reported on Friday that the company plans to fire a total of 10,000 workers globally as part of the plan.

In addition, geographical divisions will be unified and the number of managers at the firm will be cut, Calcalist said, with the aim of saving the company some $1.5 billion-$2 billion in costs to help repay Teva’s massive debt load of $34 billion.

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