Teva Pharmaceutical to Cut 14,000 Jobs, Suspend Dividend--2nd Update
December 14 2017 - 9:25AM
Dow Jones News
By Austen Hufford
Teva Pharmaceutical Industries Ltd. is cutting more than 25% of
its workforce, suspending its dividend, and closing factories and
research facilities world-wide as it works to cut costs and pay
down debt.
Teva, the world's biggest seller of generic drugs, has suffered
from declines in prices for its products in the U.S. and increased
competition for its blockbuster multiple-sclerosis drug.
The two-year restructuring plan the company announced Thursday
aims to cut $3 billion in costs by the end of 2019, out of an
estimated $16.1 billion in 2017.
"We are taking immediate and decisive actions to reduce our cost
base across our global business and become a more efficient and
profitable company," Chief Executive Kare Schultz said in a news
release.
The company said it would record a restructuring charge of at
least $700 million, mainly related to severance costs for the
14,000 positions globally. Teva said it would discontinue certain
drugs in its generics portfolio and change prices. The company also
plans to close or sell a significant number of its manufacturing
facilities across the U.S., Europe, Israel and other markets.
The dividend suspension impacts both its ordinary shares in Tel
Aviv and American depositary receipts trading in New York.
Mr. Schultz, who was named as CEO in September and began serving
in the role Nov. 1, inherited a business with falling profits, a
huge debt pile and a collapsing share price.
Late last month, in the first steps of the restructuring
process, the company said it would combine its commercial generic
and specialty drugs businesses.
"Making workforce reductions of this magnitude is difficult,"
Mr. Schultz wrote in a memo to employees. "However, there is no
alternative to these drastic steps in the current situation."
ADRs in Teva are up 18% to $18.55 in New York premarket
trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
December 14, 2017 09:10 ET (14:10 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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