UPDATE: In response to reports of massive layoffs by Teva, the Histadrut labor union called a half-day general strike for Sunday.
“The entire economy – from the airport to the banks to the seaports to the municipalities to the government service to the health clinics – will stand until noon on Sunday in solidarity with Teva’s employees,” Histadrut chief Avi Nissenkorn told reporters.
Our original story appears below:
On the eve of an expected dismissal of thousands of workers in Israel by Teva management, MK Shelly Yechimovich, chairperson of the Knesset State Oversight Committee, called on the government to intervene and prevent the layoffs. “While Teva’s new Chief Executive Officer prepares to slash the company’s workforce, he will drive to the venue where the announcement is to be made in his new Jaguar,” said Yechimovich. “The Jaguar is a clear symbol of the twisted perception of reality by the management of this company.”
That Jaguar, Yechimovich revealed at a meeting of the committee Wednesday, was given to new Teva CEO Kare Schultz as a sign-on bonus. Schultz took over as Teva CEO in November, hired specifically for his expertise in turning around pharmaceutical firms that are on the rocks – as Teva is. Teva has experienced numerous reversals in recent months, the most serious being the loss of the generic drug company’s patent on multiple sclerosis treatment Copaxone, which alone was responsible for a fifth of the company’s revenues in 2016. Teva had been fighting for years to maintain its patent on Copaxone, but a ruling by the Delaware District Court in January stripped the company of its exclusive patents. After its latest report for the third quarter of 2017 earlier in November, Teva shares fell 20 percent. Share prices are down more than 60 percent since August.
Sources in the company say that some 2,000 layoffs will be announced Thursday. A Teva research facility in Netanya will be closed down altogether, a manufacturing plant in Kiryat Shemona will be shut down or sold, and some 500 management workers at the company’s Petach Tikvah headquarters will be dismissed as well. The layoffs will affect more than a third of the company’s Israeli workforce of 6,800. Worldwide, Teva plans to lay off some 10,000 workers at its operations in Israel and abroad.
Yechimovich urged Finance Minister Moshe Kahlon and Histadrut head Avi Nissenkorn to act to prevent the layoffs. Yechimovich and others have urged the government to strip Teva of tax credits and benefits it received in the past for expanding operations in Israel. And of course, Yechimovch added, there was that Jaguar – acquired by the company for Schultz at a cost of NIS 1.3 million, she said. “This is a company that fires people without thinking twice, but also furnishes its executives with perks and benefits, and at the same time drains tens of billions in benefits from the state. Teva workers should not have to pay for the failure of management,” she said. Yediot Acharonot sought a response from Schultz, but did not receive one.