Teva Pharmaceutical Industries Ltd. is cutting more than 25% of its workforce, suspending its dividend, and closing factories and research facilities world-wide as it works to cut costs and pay down debt.
Teva, the world's biggest seller of generic drugs, has suffered from declines in prices for its products in the U.S. and increased competition for its blockbuster multiple-sclerosis drug.
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The two-year restructuring plan the company announced Thursday aims to cut $3 billion in costs by the end of 2019, out of an estimated $16.1 billion in 2017.
"We are taking immediate and decisive actions to reduce our cost base across our global business and become a more efficient and profitable company," Chief Executive Kare Schultz said in a news release.
The company said it would record a restructuring charge of at least $700 million, mainly related to severance costs for the 14,000 positions globally. Teva said it would discontinue certain drugs in its generics portfolio and change prices. The company also plans to close or sell a significant number of its manufacturing facilities across the U.S., Europe, Israel and other markets.
The dividend suspension impacts both its ordinary shares in Tel Aviv and American depositary receipts trading in New York.
Mr. Schultz, who was named as CEO in September and began serving in the role Nov. 1, inherited a business with falling profits, a huge debt pile and a collapsing share price.
Late last month, in the first steps of the restructuring process, the company said it would combine its commercial generic and specialty drugs businesses.
"Making workforce reductions of this magnitude is difficult," Mr. Schultz wrote in a memo to employees. "However, there is no alternative to these drastic steps in the current situation."
ADRs in Teva are up 18% to $18.55 in New York premarket trading.
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(END) Dow Jones Newswires
December 14, 2017 09:10 ET (14:10 GMT)