Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is considering cutting 10,000 jobs worldwide in the next two years, "Bloomberg" reports. The measure will reportedly save the company $1.5-2 billion in the next two years. The report also said that just under half of the cutbacks will be in research and development.
"Bloomberg" added that Teva had not yet made a final decision, and that the eventual number could be only half of the cited figures, but that layoffs would be in the 5,000-10,000 range.
Investors responded to the news by pushing Teva's share price up 7% on Wall Street.
Assuming that the composition of the cutbacks as reported by "Bloomberg" is accurate, the decision means that Teva is sacrificing its future in order to repay its debts in the coming years.
Such an extensive cutback in research and development will slow, and perhaps even halt, the development of new drugs. R&D processes that have already begun are liable to suffer a serious blow, in addition to the long-term effect of the layoffs on research and development of products that have not yet begun. In any case, if the report is correct, the decision will make it easier for Teva to pay the debt it accumulated due to the acquisition of Actavis.
Teva has 57,000 employees worldwide, including 10,000 in the US, 24,000 in Europe, and 6,800 in Israel. The company's debt totals $35 billion.
Published by Globes [online], Israel Business News - www.globes-online.com - on December 10, 2017
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