Israeli pharmaceutical firm Teva is attempting to prevent a complete collapse and in that effort, will fire about 25 per cent of its workforce globally, which amounts to about 14,000 workers.
During the next two years, about 1,700 workers are anticipated to be fired in in Israel alone. For Israel, this cut would be the single largest lay off ever.
And as a roll down effect, estimates are that double the number of workers in Israel would lose their jobs as the service providers for Teva would also be hit by the company’s decision.
A strike was observed by Israel’s national trade union to protest the announcement of massive layoffs. The strike resulted in cancellations of flights, reduced staff at hospitals and there was suspension of work for half a day in other critical services.
Teva is the largest generic drug company globally. There have been major setbacks to the company in recent years leading up to the crisis. Despite a slight improvement in recent months, the share price of the company has seen a steady downfall in the last two years.
Recently, a Danish business executive, Kare Schultz, has been appointed as the CEO of the company to stop the downfall.
Many however believe that the new boss being a foreigner would be less sensitive to local workers even as a largesse section of Israelis view Teva as a source of national pride. But some also argue that the cutback was long due because of the level of crisis of the firm.
The issue was addressed by Israeli Prime Minister Benjamin Netanyahu at a weekly cabinet meeting.
“It started as an Israeli company and we want it to remain as an Israeli company,” said the Israeli premier.
“Such a firm brings very high added value to the Israeli economy,” said Shlomo Maoz, an Israeli economist who has held leading positions in private firms and several public service positions.
“It is very important that it stays Israeli and that it’s research base stays in Israel,” Maoz said.
But it appears that the laid off workers of the company would be able to find suitable jobs because the Israeli economy is in pretty good shape and the rate of unemployment is also quite low at 4.2 percent.
There is also desperate demand for workers in some sectors of the Israeli economy.
The issue of the massive layoff is being exaggerated even though they are large in terms of Israeli economy, said Gilad Alper, head of Research at Excellence Nassuah Trust Company.
“Every year about 80,000 people in Israel lose their jobs, they just find other jobs,” Alper said. “It’s not anything that everyone should go nuts about and certainly does not justify in any way shape or form, any type of state intervention.”
“Israel is in a good place, there are other Israeli companies and there is great potential, but a lot of capital is needed. After new medicines are discovered, plants need to be properly managed and maintained,” Maoz said, adding this will keep Israel a competitive player in the market.
(Adapted from News.xinhuanet.com)