Extensive cut at the Teva-Tech plant in Ramat Hovav: 350 of almost 700 workers will be fired

Teva is embarking on an extensive cut at the Teva Tech plant in Ramat Hovav. The plant, which produces active ingredients for medicines, employs almost 700 workers, but by nature in the last years of the crisis in the company, its utilization has dropped to only 20%. The main reasons for this are a significant drop in sales of Copaxone, Teva's flagship drug for multiple sclerosis that the plant produces its active ingredients as well as the lack of major launches of generic products.
The dismissals agreed with the committee will begin in 18 months, meaning they will take effect in January 2022 - until then Teva will bear the costs of employing the workers, taking into account the corona crisis. During the period, the company will try to find employment for some of its employees at its other sites, but it is estimated that no positions will be found for more than a few dozen employees. Most of the employees at Teva Tech have a post-secondary education, practical training in chemistry and a relatively young age group.
The layoffs at Teva Tech are surprising because Teva recently completed the major streamlining program led by Carr Schultz, the company's CEO from the end of 2017. As part of the program, the drugmaker reached $ 3 billion in annual cost savings through a series of drastic measures that included laying off tens of thousands of workers worldwide. In Israel, Teva laid off a total of about a quarter of its 55,000 employees worldwide, and closed and sold many factories.
 As part of the efficiency plan, Teva sold the Migda plant in Kiryat Shmona to the Pimi Foundation; Closed the plant in Ashdod and the Plantex plant in Netanya, part of which was transferred to Teva Tech; Closed the two oldest factories in Jerusalem. In fact, today there are 4,000 workers left in Israel, compared to more than 7,000 at the peak. These immigrants are deployed at the R&D centers in Petah Tikva, Kfar Saba and Netanya, the production itself remains only in Kfar Saba and Ramat Hovav. The company continues to own the logistics center in Shoham, from which most of Teva Israel's operations are managed.
Schultz recently said that while the big moves are over, Teva will continue to consider further austerity measures to improve gross profitability at its plants. Teva now says that there was an attempt to maintain full operation of the plant at the amateur level which is considered to be very advanced at the technological level, but now the company admits that it has not been able to move it to profitability. Most pharmaceutical companies have in the last two decades shifted the production of active ingredients (APIs) to the Far East and Eastern Europe to take advantage of the dramatically lower costs compared to Israel, which is hit by the strong shekel.
"Increased competition with other API plants worldwide and in the Far East in particular, along with high production costs in Israel, have made the Teva Tech plant, which produces active ingredients for the pharmaceutical industry, liqueur and non-competitive - both compared to similar plants in Teva's production chain and other pharma companies. "These companies, for which Teva Tech has been used as a supplier of active ingredients, and constitute an important and significant part of the site's customers, have significantly reduced the number and volume of orders from the plant, which greatly clouded its chances of success and rehabilitation," Teva noted.
The announcement also states: "Over the past decade, Teva has invested a total of $ 300 million in Teva Tech in an attempt to rehabilitate it, and even transferred products from its API plants (including Plantex in Netanya), but even these many efforts did not help change the trend. "Now at Teva Tech, it is intended to allow the site to continue to exist, produce and bring value to nature, and it will require a significant investment by the company in the reorganization of the site, the processes carried out on it and the hundreds of employees who will continue to work on it."