With Teva entering the next stage of its sweeping restructuring plan, thousands of employees are slated to be let go from the hybrid generics and innovative medicines giant.
As part of a new bid to save roughly $700 million by 2027, Teva will lay off around 8% of its staff over the same time frame, the company said in an earnings presentation Wednesday.
The cuts will take place across Teva's 30,000 employees not including those workers who are part of the active pharmaceutical ingredient (API) business—which Teva plans to divest—and a generics joint venture in Japan, which Teva and partner Takeda sold in December, a Teva spokesperson said over email.
In all, the layoffs will affect around 2,400 employees.
The move comes as Teva enters the “Acceleration Phase” of its"Pivot to Growth" restructuring strategy the company unveiled in early 2023, CEO Richard Francis said in a statement. The overall restructuring project is designed to both streamline operations at the Israeli-American company and solidify Teva’s position as both a generic drug maker and developer of new, branded medicines.
“We’re accelerating innovative growth and strengthening our generics business, while streamlining our operations, sharpening our business and optimizing processes,” Francis said.
Aside from the downsizing initiative, Teva will also focus on modernizing its operations with tools like artificial intelligence and look to consolidate suppliers to optimize its procurement network, according to the company’s presentation.
Teva’s presentation did not clarify what types of roles will be affected or where, though streamlining manufacturing operations—and eventually selling off the company’s active pharmaceutical ingredient business—has long been a piece of the overall Pivot to Growth plan.
On that front, the company is “constantly looking on how we’re able to rationalize our manufacturing footprint,” Teva’s chief financial officer, Eli Kalif, said on a call with analysts on Wednesday. The company presently runs 35 production sites, including those for drug ingredients, but the plan is to whittle that number down to “below 30 sites by 2027,” Kalif said.
As for the planned API business sale, Francis said that his company is “still in advanced discussions” around a potential transaction but that he could not share more at this time.
Teva officially classified its API business—which includes R&D, manufacturing and commercial activities—as “held for sale” in December.
The company announced the update to its restructuring scheme as it reported its ninth consecutive quarter of growth, having made a notable turnaround under Francis, who took over during a particularly rough patch for the company in early 2023.
For the first three months of the year, Teva posted $3.9 billion in global sales, marking a 5% increase in constant currencies over 2024’s first quarter. On the company’s call, Francis attributed much of that growth to Teva’s key trio of branded medicines Austedo, Ajovy and Uzedy, which collectively grew 39% in Q1.
Teva currently expects Austedo to generate between $1.95 billion and $2.05 billion for the full year, while Ajovy and Uzedy are forecast to deliver sales around $600 million and $160 million, respectively. Meanwhile, Teva slightly lowered its overall sales guidance for the year, reducing its forecast to a range of $16.8 billion to $17.2 billion, down from a prior high end of $17.4 billion.
The company caveated that the current import tariffs that the Trump administration has rolled out in the U.S. are expected to have an “immaterial impact” in 2025. Still, the company’s new forecast hasn’t accounted for the threat of pharmaceutical-specific tariffs, which could still be introduced sometime in the future.
Editor's note: This story has been updated to specify that Teva's layoffs will not affect certain divisions of the company.