Aims to make US$2bn in annual savings by 2017
Teva Pharmaceutical Industries will cut about 5,000 jobs, 10% of its workforce, accelerating a cost reduction plan and optimising its structure and processes.
The generics manufacturer says it expects the cost-cutting programme to save about US$2bn a year by the end of 2017.
The Israeli company is following a trend among many Big Pharma companies, including Merck & Co, Pfizer, AstraZeneca and Sanofi, to cut costs.
Teva says it will 'identify opportunities to optimise value through the selective trimming of assets' that no longer fit its core business. It will also scale down 'oversized' parts of the company, while growing its generics business and core R&D programmes, expand its presence in emerging markets, and broaden its specialist medicines and over the counter (OTC) businesses.
'Teva is managing its operations to achieve high levels of effectiveness in the short term, while pursuing opportunities for the long term,' said Jeremy Levin, President and CEO of Teva.
'The accelerated cost reduction program will strengthen our organisation while improving our competitive position in the global marketplace.'
The company estimates that $1.0bn of the annual cost savings will be achieved by the end of 2014, and 70% by the end of 2015. The majority of the savings are expected to come from a reduction in the company’s cost of goods.
Teva expects to reinvest part of the initial savings in the development of complex generics and its specialist pharmaceutical pipeline, which includes more than 30 late-stage programmes.