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Teva to Cut 5,000 Pharma Jobs
Teva makes good medicine! Teva Pharmaceutical Industries Ltd. will cut around 5000 employees by next year as it restructures and becomes more flexible in the marketplace. Downsizing when it needs to, will allow the company to move quickly in and out of opportunities without heavy and weighty costs like employee labor-relation-health-benefit/pension headaches. In other words, the firm will become slimmer and more efficient.
Israel based Teva employs around 46,000 people around the globe, so this cut will be about a 10 percent reduction in its global workforce. According to Yahoo Finance, “The drug maker plans to trim oversized parts of its business while growing its generic and core research and development programs.” So far the Pharma giant plans on reinvesting whatever monies are saved from the employee cuts and piping those into “high potential areas, such as the development of complex generics and specialty pharmaceutical products.”
Teva at this time seeks to expand its emerging markets presence, as well as expand its product line in its portfolio of offerings. The over-the-counter segment is especially one that will be focused on for expansion. Places that will have a special draw will be China and Brazil, both with huge populations and growing emerging market economies with expanding income and growing health care segments, which will also trigger a growth in pharmaceutical demand.
While Teva has its eyes on the emerging market growth, it also will close two plants in the United States. By 2017 a plant in Sellersville, Pa, producing generic drugs with an employee population of 450 will be closed. Another plant in Irvine, California will be sold. Teva plans its global restructure where it will save about $2 billion dollars by 2017. The company mentions that a reduction in its accounting item cost of goods sold is expected. Teva also forecasted $20.5 billion in revenue by the end of 2013, as analysts expect the pharmaceutical company’s earnings to be at $4.00 per share, according to the research-data firm FactSet.
As one of the world’s largest creator of drugs, Teva is seeking to have its own brand as a part of its business. So while certain jobs are being cut at this time in some segments of its business, the company has many plans and projects to grow and expand in different directions as well as into new markets. Over this past year, Teva shares have traded between $36.63 and $42.83; today’s trading left the share at $40.57.