Teva confirms plan to reduce workforce by 14,000 to save $3bn

The Israeli generic drug maker confirmed its plan in a statement ​today. 

The firm said the aim is to reduce its costs by $3bn a year by the end of 2019, adding that its 2017 expenditure will be around $16.1bn.

Teva said it will optimize its generics portfolio – mentioning the US specifically – adding the move will allow it to “accelerate the restructuring of its manufacturing and supply network, including the closures or divestments of a significant number of manufacturing plants in the United States, Europe, Israel and Growth Markets​.”

Manufacturing network ​

Kaelan Hollon, Senior Director, Communications, confirmed the plan will impact manufacturing, R&D operations and offices.

She told us  “We will close or divest a significant number of R&D facilities, headquarters and office locations across all geographies.​

"Over the next 12-24 months we plan to consolidate our offices in the US from the current 7 locations into one main campus, final location TBD​."

Hollon added, "We have already closed our office in Cambridge, MA and are in the process of closing our offices in Washington, D.C., Horsham, PA, and Manhattan, NY. All streamlining efforts will be consistent with applicable local requirements. Consultations with the relevant union representatives will begin in the near term​.”

10 year plan ​

On a conference call today, president and CEO, Kare Schultz, told analysts Teva’s manufacturing network includes around 80 plants. 

Schultz added that, based on product volumes, the ideal model would be for Teva to have two to four API plants and six to eight finished dosage form production sites.

He said although Teva is unlikely to go from 80 facilities to 12 in five years, the firm would move in this direction over the next 10 years.