Israeli drugmaker Teva Pharmaceutical Industries Ltd (NYSE:TEVA) (TLV:TEVA) announced Thursday it will cut 5,000 jobs worldwide. Most of the job cuts will take place by the end of next year, reports AFP. The world’s largest generic drugmaker didn’t specify how many of its 7,500 workers in Israel will be fired. The company has a global workforce of about 46,000. It indicates that the Israeli company will eliminate about 10% of its workforce.
Teva to focus on emerging markets
Teva Pharmaceutical Industries Ltd (NYSE:TEVA) (TLV:TEVA) CEO Jeremy Levin said the job cut is a part of the company’s restructuring plan announced last year. Late last year, Teva Pharmaceutical Industries Ltd (NYSE:TEVA) (TLV:TEVA) launched a massive restructuring plan to make its business more efficient and generate about $2 billion in cost savings by 2017. The plan included shedding non-core assets, cutting excess capacity and boosting manufacturing efficiency.
Teva Pharmaceutical Industries Ltd (NYSE:TEVA) (TLV:TEVA) estimates it will realize $1 billion in cost saving by 2014, and about 70% by 2015. The drugmaker will use its savings to focus on its core generic business and R&D programs. The company is also developing some high-potential, complex pharmaceutical products. Teva Pharmaceutical Industries Ltd (NYSE:TEVA) (TLV:TEVA) became the world’s No.1 generic drugmaker through a series of acquisitions. Meanwhile, the company also diversified into patent-protected drugs and over-the-counter medicines.
Teva Pharmaceutical Industries Ltd (NYSE:TEVA) (TLV:TEVA) said it will bolster its presence in emerging countries such as China and Brazil. The company recently announced it will sell its manufacturing unit in Irvine, California. Teva Pharmaceutical will also shut down its generic drug plant in Sellersville, Pennsylvania.
Teva sales plummet
In August, Teva Pharmaceutical Industries Ltd (NYSE:TEVA) (TLV:TEVA) posted 8% decline in its Q2 sales. The company blamed poor sales in Europe and the U.S. for sales decline. Surprisingly, sales of its branded medicine Provigil also fell drastically. Provigil is used to treat tiredness. For the full year, the company expects EPS of $4.85 to $5.15 and revenues of $19.5 billion to $20.5 billion.
Another drugmaker, Merck & Co., Inc. (NYSE:MRK), recently announced it will cut 8,500 jobs. The company has already announced 7,500 layoffs. The latest announcement will take the total job cuts to 16,000.
American shares of Teva Pharmaceutical Industries Ltd (NYSE:TEVA) (TLV:TEVA) rose 2.045 to $40 at 11:40 AM EDT.
