Based: Petah Tikva, Israel
Announced layoffs: 5,000
Chief executives generally don't fall victim to their own job-cutting programs, but that's what recently happened to Teva ($TEVA) CEO Jeremy Levin.
Levin was already in the middle of implementing a cost-cutting strategy at Teva last summer when a U.S. appeals court upturned the patent on the company's leading drug, multiple sclerosis treatment Copaxone. Faced with confronting generic competition for the drug 18 months earlier than expected--beginning in May 2014--Teva announced 5,000 more job cuts in a push to save $2 billion by 2017.
But Israeli labor leaders and, later, government officials weren't so keen on the new plan when they learned that the job cuts could affect Teva's home country, and outraged unions vowed to strike. Labor leaders lambasted Teva execs for reaping big paychecks while slashing Israeli jobs, and some shareholders publicly joined in, calling on Levin and others to take pay cuts.
Shortly after, Israeli media began reporting on a conflict between Levin and Teva's board over the cost-cutting moves. Teva denied the conflict, but less than three weeks after the layoffs announcement, Levin had departed.
Now, Teva's got a new CEO, Erez Vigodman, ready to step in come February, and he'll have his work cut out for him. The company has been striving to shed costs partly by focusing on bigger, more efficient manufacturing facilities and moving production to lower-cost locations around the globe. Those moves have triggered job cuts of their own; Teva closed a plant in Sellersville, PA, last May that employed 474 workers, and in February it announced plans to sell a plant in Irvine, CA, where it had trimmed more than 200 jobs in the past few years.
But a procurement overhaul is where Teva expects it can save the most money. The company hopes centralizing purchasing will help it eliminate overlap and ink better deals with vendors, leading to $700 million in savings a year. -- Carly Helfand (email | Twitter)
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