Teva Pharmaceutical Industries Ltd (ADR)(NYSE:TEVA) and Histadrut labor federation have reached an agreement which will see the company’s administrative staff who are taking voluntary redundancy awarded preferential severance packages. This is part of Teva’s restructuring efforts which are taking place globally and which are aimed at eliminating over 25% of the generic drugmaker’s workforce. This is roughly about 14,000 jobs.
“After weeks of talks, the Histadrut and the workers’ committee and the company’s management reached an agreement today to give the administrative staff honourable severance packages,” Histadrut labor federation and Teva said in a statement that was released jointly.
Forms of assistance
There was no information however on how many workers would benefit from the agreement. Besides the raised severance package, the dismissed workers would also be offered other forms of assistance such as help in finding other jobs.
In a two-year plan, the world’s biggest generic drugmaker aims to cut approximately $3 billion in costs before 2020. This will result in about 1,700 jobs being lost in its home country of Israel. Since the job cuts were revealed, there have been protests by workers in the Middle Eastern country some of which have led to the disruption of operations. One of the Teva plants that has witnessed unrest is the Jerusalem facility which makes tablets and which has a workforce of around 500 people. An inhaler plant adjacent to the tablet plant has also witnessed protests and disruption of operations.
Last month the prime minister of Israel, Benjamin Netanyahu, held a meeting with the new chief executive officer of Teva, Kare Schultz, with a view to limiting the job cuts. Schultz however insisted on the cuts saying they were imperative if the future of Teva was to be secure and prevent a possible takeover bid.
After the protests however, the workers seem to have won a small victory after it was announced that instead of getting rid of 340 positions at the Jerusalem facility, only 200 workers will be laid off this year. The axe will fall on the remaining 140 in 2019.
On Friday shares of Teva Pharmaceutical Industries fell by 1.84% to close the day at $19.22 per share.