Just three weeks after Teva CEO Kåre Schultz took office, there is growing speculation that the company will soon launch a massive wave of layoffs, which is expected to reach 20% of its workforce, Israel’s Channel 2 News reported Thursday. Teva currently employs close to 57,000 and most of the layoffs are expected to be in the US and Europe.
However, the wave of layoffs is expected to hit Israel as well, where Teva is expected to fire 1,000 employees. In recent months, the company has already made some cuts in manpower, and department managers were asked to prepare for another wave that will be implemented gradually in the coming weeks and months.
The anticipated massive layoffs come against the background of particularly weak results for the third quarter of the year, as Teva’s debt has grown to an alarming $34.7 billion. These figures raised the concern that the Company would not be able to meet its debt repayments and severe efficiency measures would be called for.
Sources in Teva said in response to the Channel 2 story that “the company does not address rumors,” adding that “there is an intention to implement an efficiency program, but there is still no agreed plan and no known scope at the moment.” But as early as last summer, Teva announced that it intends to reduce its workforce in Israel and abroad by 7,000, including by closing down exiting operations.
Kåre Schultz is renowned for his dramatic efficiency measures in the companies he has run, most notably the Danish Lundbeck, where in 2016 he cut loose 1,000 employees as part of a plan to save about $445 million.