Teva spares some of the 350 manufacturing jobs in Israel that were to be cut

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Teva has reduced the number of cuts it will make at one of its manufacturing plants in Israel by 65 in the face of political pressure.

Cutting jobs in its home country has always been a tricky proposition for Teva CEOs, and current top executive Yitzhak Peterburg is finding that to be the case himself as he tries to cut debt at the struggling company.

Three weeks after announcing it would cut 350 jobs at two plants in Israel, the generics drugmaker has already adjusted that number to 285. Teva says it has reduced planned cuts at its facility in Neot Hovav by 65 jobs to 110 of its 960 workers, instead of the 175 jobs initially set to be lost. Talks with the union at its bigger Kfar Sava plant have not been as productive, however.

“At the beginning of the consultation process, the company was able to find employment solutions for dozens of employees with capabilities and skills suitable for mobility, while giving preference to employees coming from a complex social background,” Denise Bradley, Teva’s SVP of corporate reputation said in an email.

“Unfortunately, despite our many attempts over the last few weeks to reach agreements with the workers' committee at the Kfar Saba site, we cannot report similar progress at this stage,” she said.

Teva has said it will cut 175 jobs at Kfar Saba..

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The jobs in Israel are just a small piece of the 7,000 positions the company earlier this month said are being eliminated worldwide. It intends to close 15 plants in the next two years, six yet this year and another nine in 2018.

It also has said it will exit 45 markets by the end of 2017 as it worked to offset a deteriorating generics market that has body slammed sales of the generics leader. It came as the company reported an 18.4% drop in Q2 earnings. The company’s share are off nearly 50% since the announcements.

The drugmaker ran into worker and political resistance as soon as the cuts in Israel were announced and almost immediately revised its plans.  

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Union leader Eliran Kozlik told Bloomberg recently that workers believe they have become victims of Teva management’s misguided decision to pay $40.5 billion to buy the generics business of Allergan even as pricing leverage in the U.S. generics market was collapsing.  

“This crisis comes from a failure in management decisions,” Kozlik said. “If a worker made that kind of mistake, he’d be punished on the spot.”

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Other Teva execs have had to march back plans to make cuts to manufacturing in the home country. When former CEO Jeremy Levin planned to make big production cuts there four years ago, the board balked. The dispute was among issues that led to him losing his job.