Avi Nissenkorn, the leader of Israel’s Histadrut national labor federation, said Wednesday that the union would declare a general strike for several hours on Sunday to protest massive layoffs by the Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) giant.
The strike announcement, which followed reports today that the company will announce as many as 3200 layoffs tomorrow, or nearly 50 percent of its total work force in Israel, will include banks, health care facilities, municipal services, and other services in the public sector. The announcement is the latest piece of bad news in a catastrophic half-year for the company that has seen its stock price plummet and had its credit rating to – BBB, just one grade above junk bonds.
“Teva, the flagship of Israel’s manufacturing sector, is turning into a symbol of the destruction of Israeli manufacturing… it is an absolute scandal that the first step Teva took was to fire workers in Israel,” Nissenkorn fumed. “Teva has benefited from NIS 22 billion in tax breaks since 2006 (but now) they are turning their backs on the country and the people here. The government cannot just sit on the side and watch.
“Just like they knew how to give out tax breaks, now it must find a solution for this,” Nissenkorn added.
Teva’s avalanche in recent months has been one of the biggest stories in the country during 2017. In August, the company announced a massive downsizing operation to eliminate 7,000 jobs in Israel by the end of 2017, a first step towards ceasing operations 45 international markets and closing 15 factories by the end of 2018.
That move followed a disappointing second quarter for Teva in which the pharmaceutical giant reported a $6 billion GAAP loss ($5.94 per share) and a non-GAAP net profit of $1.02 per share on $5.7 billion in revenue.