Updated on 11 October 2013
Teva axes workforce by 10 percent to accelerate cost-reduction
Singapore: Teva Pharmaceutical Industries is slashing its workforce by about 10 percent in order to accelerate its cost-reduction efforts. The decrease in staff will affect about 5,000 employees and will be completed by the end of 2014.
Teva will scale down oversized parts of the company while boosting its generics business and core R&D programs including, high-value complex generics, expanding its presence in emerging markets and broadening its portfolio, especially in its specialty medicines and over-the-counter businesses.
Teva now expects to see about $2 billion in annual cost savings by the end of 2017, at the high end of its prior estimates. It expects that $1 billion of these cost savings will be realized by end of 2014 and 70 percent by the end of 2015. The majority of these savings are expected to come from a reduction in cost of goods. Pre-tax costs for the corporate restructuring program are estimated to be about $1.1 billion.
Late last year, Teva unveiled restructuring plans that included divesting non-core assets, improving manufacturing efficiency and reducing excess capacity. The company has grown through a series of acquisitions to become the world's largest maker of generic drugs but also has diversified into nongeneric businesses such as over-the-counter medicines and patent-protected, branded drugs.