Teva
Photo: Reuters
Teva reports massive losses, cuts 7,000 jobs
The pharmaceutical giant will fire 7,000 employees, shut down 15 plants and pull out of 45 countries in 2017-2018 after being stung by declining prices for generic drugs and debt.
Teva Pharmaceutical CEO Yitzhak Peterburg said Thursday that the company will cut 7,000 jobs by the year's end and take a host of other cost-cutting measures, as well as pull out from 45 countries and close or sell six plants in 2017 and nine more in 2018.
Teva reported an 18.4 percent drop in second-quarter earnings on Thursday, a bigger drop than Wall Street had expected, causing its share price to plummet by 34.5% in the just two days.
Photo: Reuters
After the disappointing quarterly report and a huge write-down of $ 6.1 billion of the company's value—which is basically an admission that last year's $40 billion acquisition of Allergan Pharmaceutical was a failure—the company had to make serious cuts to pay their accumulating debt.
Speaking about the lay-offs, Peterburg said "This is not an easy decision, but we believe it is important first and foremost to continue to employ in Israel." Last month, Teva announced the dismissal of 350 workers from factories in Kfar Saba and Teva-Tech.
"All of us in Teva understand the frustration and disappointment of our shareholders in light of these results," said Peterburg. "The results for the second quarter were lower than we expected as a result of the performance of our generic business in the US and the continuing deterioration in Venezuela. These factors also led us to reduce our forecasts for the rest of the year.
"This is happening due to the decline in sales in the US, and our customers' demand for larger discounts. Consumers are getting better prices because of competition in the generic market. We have suffered a severe blow to our generic drug business in the US."
