December 13, 2017 / 8:04 AM / 7 months ago

Fears of Israeli job cuts at Teva sparks call for general strike

(This version of the story was refiled to modify the headline)

A man cleans near the logo of Teva Pharmaceutical Industries at their plant in Jerusalem December 14, 2017. REUTERS/Ammar Awad

By Tova Cohen

TEL AVIV (Reuters) - Reports that Teva Pharmaceutical Industries (TEVA.TA) is planning a restructuring involving mass layoffs in Israel sparked calls on Wednesday for a half-day general strike to be held in protest.

The plan includes closing Teva’s research and development center in the coastal city of Netanya, selling its logistics center in Shoham and cutting 3,300 jobs out of 6,430 nation-wide, the Israeli financial news website Calcalist reported.

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Teva (TEVA.N), the world’s largest generic drug maker which employs more than 56,000 people, did not comment on the details of the report. But it confirmed there was a restructuring plan that it would discuss in a 1300 GMT conference call on Thursday.

Saddled with nearly $35 billion in debt since acquiring Allergan’s (AGN.N) Actavis generic drug business for $40.5 billion, Teva made a series of changes after Kare Schultz joined as its new chief executive on Nov. 1.

Israeli Finance Minister Moshe Kahlon said only that he was following the situation closely. Avi Nissenkorn, chief of the Histadrut labor federation, declared a half-day general strike for Sunday, the beginning of the Israeli work week.

“The entire economy - from the (Ben Gurion) airport to the banks to the seaports to the municipalities to the government service to the health clinics - will stand until noon on Sunday in solidarity with Teva’s employees,” Nissenkorn told reporters.

He predicted mass layoffs under the Teva restructuring plan, which he described as “ruinous” for a company that was long a symbol of Israeli enterprise.

One of the plants earmarked for sale, Calcalist said, is the Teva Tech factory in Israel’s southern Negev desert. It produces raw materials for the pharmaceutical industry and employs 870 workers, according to Teva’s website.

“This is a young plant ... and hundreds of millions of shekels of Israeli government money were invested here,” Meir Babayoff, chairman of the Negev region in the Histadrut, told Israel Radio.

He vowed to stop any layoffs and called on Israel’s government “to wake up”.

Last week Bloomberg reported that the firm was considering cutting up to 10,000 jobs to reduce costs by $1.5 billion to $2 billion in the next two years.

Teva said on Tuesday that Yitzhak Peterburg, who previously served as its chairman and interim CEO, had resigned from its board with immediate effect.

Schultz ousted top division heads last month and said he would combine the firm’s generic and specialty drug businesses. He had also said Teva was working on a detailed restructuring plan to be unveiled in mid-December.

Additional reporting by Steven Scheer; Editing by Alexander Smith, Greg Mahlich

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