(MENAFN- Gulf Times) Striking workers idled Israel's international airport, government offices, banks and stock market for half a day, pressing to lessen the impact of Teva Pharmaceutical Industries Ltd's turnaround plan, which includes firing 25% of the drugmaker's employees.
Teva workers protesting near facilities around the country tied up morning rush-hour traffic yesterday. The walkout called by the Histadrut labour federation lasted until noon, in response to management's announcement on Thursday that it would cut 1,700 jobs and shut down two plants in the country. The firings are part of a bigger plan to slash 14,000 jobs worldwide as Petah Tikva, Israel-based Teva seeks to whittle down a debt pile more than twice its market capitalisation.
Prime Minister Benjamin Netanyahu told members of his cabinet he would use several 'tools at our disposal to prevent the closure of a Teva manufacturing plant in Jerusalem and try to 'limit damage for the company's employees, according to a text message from his office.
Teva has been struggling since it paid almost $41bn last year to acquire Allergan's generics unit, a deal that failed to yield the anticipated sales boost. Compounding the problem is the loss of its monopoly on Copaxone, the multiple sclerosis injection that at one point generated half of Teva's profits.
Hundreds of Teva employees blocked central roads in Jerusalem and chanted slogans as they marched to the Netanyahu's office as cabinet members arrived for their weekly meeting, police said. The government is considering a grant to Teva that would enable the company to reduce the number of jobs cut in Israel, the Haaretz newspaper said, without saying how it got the information.
'Our factory is bleeding and the situation is bleak, Teva union leader Itzik Ben-Simon told Israel Radio.
The company, whose expenses will total $16.1bn this year, said most of the cost reduction will take place in 2018. Teva will also record a restructuring charge of at least $700mn.
Teva shares rose as much as 2.7% yesterday after jumping 13% on December 14 when newly installed chief executive Kare Schultz outlined the restructuring plan. Its American depositary receipts in New York rose 10% and added 8% the following day.
Schultz said his top priority is to bring Teva's leverage below 4 times Ebitda, or earnings before interest, taxes, depreciation and amortisation, by the end of 2020. The ratio was 4.7 last quarter. The proposals include paying down $4bn of bank loans within a 'relatively short period, he said.
Schultz, who was offered $40mn in cash and stock to take over the company in November, swiftly instituted a management shakeup and announced plans to reorganise Teva's generic and branded drug businesses into a single, streamlined entity.
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