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UPDATE 2-Teva Pharmaceutical set for major layoffs in Israel, U.S. -report
November 23, 2017 / 1:47 PM / in 18 days

UPDATE 2-Teva Pharmaceutical set for major layoffs in Israel, U.S. -report

(Adds comments from Israeli minister)

By Tova Cohen and Ari Rabinovitch

TEL AVIV, Nov 23 (Reuters) - Teva Pharmaceutical is expected to cut up to a quarter of its 6,860-strong workforce in Israel, and a few thousand more staff in the United States, media reported Thursday, though a minister said the figures may not be accurate.

The world’s largest generic drugmaker will send termination letters to “tens of percent” of its 10,000 employees in the United States in coming weeks, Israeli financial news website Calcalist said, citing people familiar with the matter.

The debt-laden company’s stock closed up 4.6 percent in Tel Aviv on the report. A spokesman for Teva, which was seen as one of Israel’s great corporate success stories, declined to comment.

Teva had been widely expected to cut costs after warning this month it would miss 2017 profit forecasts due to falling prices of generics in the U.S. and weakening sales of its multiple sclerosis drug Copaxone.

Teva has also been saddled with nearly $35 billion in debt due to its $40.5-billion acquisition of Allergan’s generic drug business Actavis last year. Investors have been pushing for clarity on its future.

Teva has already been selling off assets to help meet its debt payments.

Teva’s new Chief Executive Kare Schultz was working out the details of the job cuts with regional management in Israel and the United States, Calcalist reported.

It said between 20-25 percent of the staff in Israel could go, including Michael Hayden, Teva’s chief scientific officer and president of research and development.

Israeli Economy Minister Eli Cohen told Reuters he had spoken with officials at Teva and was told that the numbers leaked to the media were off.

“I spoke to them this morning, they said the figures are not accurate,” Cohen said.

The Histadrut labour federation said it would not accept any unilateral moves by Teva’s management.

“Any efficiency measures, if and when they arise, will be done through negotiations and with the agreement of the Histadrut and the labour unions,” Histadrut spokesman Yaniv Levi said. “Lay-offs are the last resort.”

Fitch Ratings downgraded Teva’s debt to junk this month. (Editing by Andrew Heavens)

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