The cuts are being made as the company grapples with a debt of between $30 and $35B and a restructuring of its R&D in order to combat dramatically declining revenue from its generic pipeline.
Cuts implemented by Israel-based Teva Pharmaceuticals have hit the shores of the United States. The company is laying off 208 people in the Philadelphia area.
The cuts are being made as the company grapples with a debt of between $30 and $35 billion and a restructuring of its R&D in order to combat dramatically declining revenue from its generic pipeline. In December, Teva announced it was slashing approximately 14,000 jobs, about 25 percent of its global workforce. Chief Executive Officer Kåre Schultz told employees in an email that the majority of those who would lose their jobs would be notified within 90 days.
On Thursday, the Philadelphia Inquirer reported that the company filed notices with Pennsylvania Department of Labor and Industry alerting them to the cuts. The Inquirer said the cuts would occur across several of Teva’s locations in the Philadelphia area. Citing the notice the Inquirer said Teva will cut 65 positions at locations in North Wales and Horsham, 47 positions in West Chester and 96 positions in Frazer and Great Valley. The Inquirer said the cuts are expected to occur between Thursday, Jan. 18 and the remainder of the year.
In addition to eliminating positions, Teva announced in December that it was also closing a number of facilities as part of its restructuring. In that announcement, Teva said it will close or divest a “significant number of R&D facilities, headquarters and other office locations across all geographies.” That will help the company achieve its goal of efficiency and substantial cost savings, the company said. Many of the facilities that were being cut were those the company gained through acquisitions and were in many ways redundant.
The cuts of employees and facilities are expected to save the company about $3 billion by the end of 2019. Those are not the only cost-cutting measures the company has taken though. Earlier this month, the company’s board of directors announced they were taking a 50 percent reduction in pay. The cut in pay for company directors was decided the same day the massive cuts were announced.
Another financial concern Teva didn’t want to face at this time is a federal fine. Earlier this week, the company was forced to pay a $22.1 million fine to Israeli authorities as part of an international bribery settlement. Those fines are on top of more than $500 million the company paid to the United States in 2016 for the same charges.
Amidst all the negative reports about the company, there have been a few bright notes this year. Earlier this week, the company won approval from the U.S. Food and Drug Administration for Trisenox (arsenic trioxide) as a first-line treatment of acute promyelocytic leukemia. The company also launched the authorized generic of Estrace vaginal cream this month. The cream is used for the treatment of moderate to severe symptoms of vulvar and vaginal atrophy due to menopause.
Teva will provide full guidance for 2018 in February and will share a longer-term strategic direction for the company later in 2018.
