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JERUSALEM — Teva Pharmaceutical Industries Ltd. is slated to reduce its global workforce by about 10% under a restructuring plan aimed at slashing costs and optimizing its organization and processes.
Teva said Thursday that most of job cuts, which will total approximately 5,000 employees, will be completed by the end of 2014.
The Israel-based pharmaceutical company added that it will continue identify opportunities to pare assets "that no longer fit its core business or are not critical to its future."
Plans call for Teva to scale down oversized parts of the company while growing its generic drug business and core research-and-development programs, including high-value, complex generics, expanding its presence in emerging markets, and broadening its portfolio, particularly in its specialty medicines and over-the-counter businesses.
Teva’s worldwide restructuring program, introduced in December 2012, includes efforts to divest noncore assets, increase organization effectiveness, improve manufacturing efficiency and reduce excess capacity.
"Teva is managing its operations to achieve high levels of effectiveness in the short term, while pursuing opportunities for the long term," stated Jeremy Levin, Teva’s president and chief executive officer. "The accelerated cost-reduction program will strengthen our organization while improving our competitive position in the global marketplace. We understand that this may be a difficult time for our employees and are committed to act with fairness, integrity and respect, and provide support during this time."
Teva reported that it expects to realize about $2 billion in annual cost savings by the end of 2017, compared with the previous savings guidance of $1.5 billion to $2 billion. The company estimates that $1 billion, or 50% of the annual cost savings, will be realized by the end of 2014, and 70% by the end of 2015. Most of the savings are expected to come from a reduction in the cost of goods, Teva added.
The company expects to reinvest part of the initial savings in 2014 and 2015 in high-potential programs, including the development of its complex generics and specialty pharmaceutical pipeline, which has more than 30 late-stage programs.
