Employees of Teva Pharmaceutical Industries Ltd. can rest easy. According to Chief Financial Officer Eyal Desheh, there are no new plans to cut jobs in the near future. This should come as a relief after the massive 5,000 employee layoff of 2013, named by Fierce Pharma as one of the top 10 largest of the year.
According to The Philadelphia Inquirer, Desheh made the following statement Monday at the Morgan Stanley Global Healthcare Conference in response to the question of whether Teva had plans for more cuts:
I want to be very careful because this is a major managerial challenge: Reduce your costs, become more efficient, and at the same time grow the business and enter new areas…That’s a little bit contradictive. I think we can do both, but another cost-cutting round will be counterproductive to growth.
The large employee cut (about 10%) was performed as part of Teva’s worldwide restructuring program to save $2 billion by the end of 2017. The company has been making an effort since 2012 to optimize value by focusing on its core business and trimming out assets that are not critical. Desheh said at the conference that about 12 of the company’s 74 worldwide facilities are being closed or sold. He continued,
Right now, we spend about $10 billion a year buying from others – all kinds of stuff. Materials, machines, finished products – not a lot but some – services, rent, you name it. Everything we spend, other than royalties and cost of labor, we consolidated under one head of global procurement, and she sits in New Jersey and manages our operation.
Desheh was referring to Lisa Martin, who joined Teva in April 2013. He says that it may take three to four years to fix the problem due to existing contracts, but there are expectations for a stronger company to grow from it.