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Teva, the struggling Israeli drugmaker, said it would cut 14,000 jobs even after the country’s national trade union called a general strike and threatened “total war” to stop the plans.
The pharmaceuticals group did not say where it would make the cuts, equivalent to 25 per cent of its global workforce, although unions fear the company’s roughly 7,000 Israeli workers will bear the brunt of job losses.
As well as announcing plans to close a “significant number” of factories and research centres, the company said it would suspend its dividend and sell off assets as it seeks to cut its $16bn of annual costs by $3bn before the end of 2019.
“We are launching a comprehensive restructuring plan, crucial to restoring our financial security and stabilising our business,” said Kåre Schultz, Teva’s recently-appointed chief executive.
He added: “We are taking immediate and decisive actions to reduce our cost base across our global business and become a more efficient and profitable company.”
Teva is groaning under $35bn of debt, much of it taken on to fund the ill-fated acquisition of Allergan’s generics business, which closed shortly before the price of copycat medicines started to crumble.
Last month, Fitch, the credit rating agency, downgraded its rating to junk territory, citing “significant operational stress at a time when it needs to reduce debt.
Teva also recently lost patent protection on its top-selling product, a multiple-sclerosis injection known as Copaxone, which accounted for almost 50 per cent of the drugmaker’s operating profit last year, according to Credit Suisse.
Teva’s New York-listed shares — which have lost 42 per cent of their value this year — rose 7.6 per cent in pre-market trading as analysts warned the company could struggle to implement the job cuts in the face of opposition from Israel’s unions, politicians and media.
On Wednesday, the Histadrut union called a general strike for Sunday, while Meir Babayov, one of its officials, said: “We will launch a total war. The entire country will tremble. We won’t let the government sit quietly. We won’t let this happen.”