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Union pressure delays Teva's Israeli layoffs

Workforce cuts put on hold

TevaTeva's workforce in Israel has been given a temporary reprieve from the firm's sweeping job cuts after pressure from trade unions and the government.

The pharma company announced last week it plans to lay off 10 per cent of its workforce worldwide - equivalent to 5,000 positions - as part of a plan to reduce its operating costs by $2bn a year by 2017.

Around 700-800 of those reductions were due to take place in Israel, and the news was greeted with a wave of criticism from the public, egged on by the Histadrut labour federation representing state employees and the media, with much made of the fact that Teva has enjoyed hefty tax breaks under Israel's economic stimulus regime.

A meeting between Teva's senior management and Histadrut this week resulted in a pledge by the drugmaker not to proceed until it had sat around the negotiating table with the union to discuss the scope and timeline for the job cuts.

Histadrut looks likely to take a robust stance on the issue, with its chairman Ofer Eini suggesting that the law in Israel should be changed, with the re-introduction of a clause that would make it impossible for companies receiving state tax exemptions to fire employees.

Teva wants to trim back its costs because it is facing increased competition for multiple sclerosis (MS) blockbuster Copaxone (glatiramer acetate), as well as a leaner period for its generic drugs unit in the coming years as big pharma companies start to recover from the 'patent cliff' that has hit hard in recent years.

The company had set a short timeframe for its restructuring drive, with most of the staff layoffs occurring before the end of 2014.

Article by
Phil Taylor

17th October 2013

From: Research, Sales, Marketing

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