TEVA PHARAMACEUTICAL INDUSTRIES is to cut 14,000 jobs, more than a quarter of its workforce, as part of a restructuring programme to reduce costs by US$3bn by 2019.
Jobs will be lost across the world, with closures and divestments of “a significant number” of manufacturing plants, R&D facilities, headquarters and offices. Teva will carry out a review of all its generics and specialty R&D programmes, to allow it to prioritise core activities and abandon others. The company has already announced a simplified organisational structure to reduce the number of layers of management and simplify the business structure. It will also make price adjustments to existing medicines and discontinue others.
Most of the job losses are expected in 2018, with most announced over the next 90 days. Consultations with employee representatives are expected to begin soon.
Teva’s business has struggled due to the expiry of its patents on its most lucrative medicine Copaxone, which is used to treat multiple sclerosis. It also took on large debt to buy the generics business of Allergan in 2015.
Teva says it will also suspend dividends on ordinary shares and will not pay its annual bonus for 2017. Kåre Schultz, Teva’s president and CEO, said that the business would also be helped through the launch of two new drugs – Austedo, to treat Huntingdon’s disease, and fremanezumab, to treat migraines.
“These are decisions I don't take lightly but they are necessary to secure Teva's future. We will implement these changes with fairness and the utmost respect for our colleagues worldwide. Today's announcement is about positioning Teva for a sustainable future which we will achieve with our talented people. We will ensure that we continue to provide high quality medicines to the many patients we serve every day, while adhering to the highest standards of GMP compliance,” said Schultz.
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