Teva CEO says job cuts are small part of efficiency plans
|Teva CEO Jeremy Levin|
Teva Pharmaceuticals ($TEVA) CEO Jeremy Levin is determined to convince investors that the drugmaker is on the upswing these days. With some refocusing and restructuring, the generics giant can find a new path to the glories of yesteryear, Levin contended at the J.P. Morgan Healthcare Conference. And that restructuring--i.e., cost-cutting--won't require a major hit to payroll, he said.
As the Philadelphia Inquirer reports, Levin touted his cost-cutting plans at the conference--but not just for their effect on the bottom line. With 74 locations in 120 countries, Teva is too diffuse to zero in on its goals.
And those goals are complicated. To continue its generics dominance with decent profit margins, Teva has to keep a lid on manufacturing costs and take advantage of its geographic spread--efficiently. At the same time, Teva wants to build up a stable of profitable branded drugs--which means productive R&D (read expensive, but no more so than necessary). Smart buy-ins can help, too.
Development and deals require cash, of course. Hence Levin's move to squeeze costs out of its current operations. He's driving for $1.5 billion to $2 billion in savings over the next 5 years. It appears that Levin is more interested in scaling down Teva's footprint--phasing out some of those 74 locations--than in simple layoffs. Levin says "head count" will only play a "small role" in his efficiency plans, the Inquirer reports.
- read the Inquirer piece
Cost-cutting Teva chucks plans for $300M facility
Levin lays out 4-year plan to turn Teva into a brand
What do Teva investors want from their new CEO?
Teva will cut $2 billion in costs to get ahead, CEO Levin says
New Teva CEO, new small-is-beautiful M&A strategy