Following two weeks of strikes, Teva workers in Israel have won a small victory through their efforts to save manufacturing jobs. Meanwhile, new CEO Kåre Schultz has gotten a lesson in the difficulties of making cuts in the company's home country.
Teva, which had planned on eliminating 340 positions at a plant in Jerusalem this year, confirmed today that it intends to cut only 200 in 2018. The other 140 cuts will be postponed until next year when Teva will close the plant.
That is all part of about 1,750 cuts slated in the country as part of 14,000 world-wide as the financially distressed generics company scrambles to fix big problems.
"Teva is conducting an intense process of consultation with the unions and is close to reaching agreements regarding the number of employees to depart the Jerusalem site in the first quarter of 2018, as well as regarding the process of closing the Jerusalem site at the end of 2019, as was communicated …” Teva said in a statement.
As a source told Globes, and Teva acknowledged today, initial reports that the company would not lay off any workers until the end of 2019 were incorrect. However, out of consideration for workers, the company has managed to find jobs for more workers, meaning the first round of layoffs will be one third smaller.
RELATED: As Israel strikes to protest layoffs, it’s déjà vu for Teva on a larger scale
The decision follows widespread strikes that have shut down manufacturing at the plant and interrupted operations at banks, hospitals and elsewhere after Teva’s new CEO announced his intent to cut 14,000 jobs globally, mostly by closing manufacturing and R&D sites.
Those cuts include 1,750 positions in Israel. Schultz was adamant about the need to proceed with the cuts, even after Israel Prime Minister Benjamin Netanyahu encouraged the debt-laden drugmaker to keep open its manufacturing facility in Jerusalem.
But workers didn’t relent either, continuing protests that Globes said include workers demonstrating in front of the homes of Teva directors.
It’s not the first time Teva has been faced with intense resistance to plans to pare down its local workforce. In October of 2013, Israeli worker representatives showed up at the company's headquarters in Petah Tikva after the company said it would cut 5,000 global Teva jobs.
Amid battles with his board about the need to cut jobs in Israel, Jeremy Levin left the top position there. But with a much changed board in place now, Schultz appears to have the backing needed to move forward with the planned cuts in hopes of righting the ailing generics company.