Teva sees no new R&D projects in Israel

Kare Schultz Photo: PR

A recording of a meeting between management and Teva Tech employees reveals how much the company is scaling back its R&D activity.

A recording of a meeting that reached "Globes" on Friday evening reveals the program of layoffs at the Teva Tech plant at Neot Hovav. The managers of the site say that there will be no more research and development at Teva Tech for new products (chemical R&D for active pharmaceutical ingredients).

Udi Amir, VP head of Teva API (TAPI) Israel and formerly manager of the Teva Tech plant, said, "We need to return to where Teva was 15-18 years ago. The company can't cope with this size.[We're moving towards] small R&D, a small number of production sites, that's our size. It hurts terribly, it's awful, we've grown terribly fast in fifteen years, and now we have to return to our dimensions, and at those dimensions there's no place for the R&D at Teva Tech. We don't have that volume of activity.

"We're developing very many products, most of those products don't have enough customers, there's no way of supporting them. You're doing superb work, but it's not helping the business. You can blame everyone, we adopted a mistaken strategy, while the rules of the game changed. That's OK, we'll take all that's coming to us, but those are the facts.

"I grew up here, and I wanted to return to the people I grew up with and close the circle. [Layoffs] are the last thing I wanted to do.

"We're not entirely shutting down the R&D at Assia [Petah Tikva], we'll leave a small number of people who will provide service on certain very specific things that are unique to Israel, but I won't retain someone just to be able to say to them another year, when their job has no sizeable activity, and then I don't know what to give them."

An unidentified woman from Teva management said, "The nature of the R&D in Israel has changed. I have said in the past that there will probably be no more new product projects of the kind we used to know, and today we're saying it officially - we won't start new projects here. What there used to be isn't coming back. That means there will be no activity here that we can sustain, and so most of those here in this room (Teva Tech R&D personnel, and most of the employees at the Teva Tech plant) will be laid off.

"I hinted and said that you should all participate in the voluntary retirement program. Today I can tell you that from February 14 we will start the process of layoffs, in sorrow, but out of necessity arising from a reality that can't be changed. The same will happen at Assia. It's no trivial matter to shut down two R&D centers at the same time, but we shall do it with respect, in seriousness, supportively and considerately. This is the time for decisions. This is the time for action.

"The cut is so deep that that it's impossible to maintain R&D split between the two sites. That would leave us with two sites so shrunk and inflexible that within a couple of years they'll say to us, guys, if that's the performance you're capable of, then forget it, and so we have to leave behind the scenario of R&D at two sites. The fact that the cut is deep within Israel is not meant to comfort you, but it should free you from all kinds of perceptions (that the workers in the periphery are being sacrificed first - G.W.)."

"The Histadrut sold us out"

A Teva Tech employee said, "What Udi Amir says is not quite true. There are products with high demand that were on the brink of approval and distribution, and they told us to stop everything and transfer it to India. It could be that there really is a need to consolidate the R&D sites, but why choose to close down the R&D in the periphery particularly? And that after Kare Schultz promised to avoid layoffs in these areas as much as possible. It turns out that the Histadrut signed off on layoffs among R&D employees in exchange for meager benefits for Teva Tech's production staff. The Histadrut sold us out.

"They're giving the workers in Jerusalem 9-12 monthly salaries in severance pay, and us only four. So who's the periphery? Jerusalem, or the people in Beersheva, Dimona and Yeruham?"

Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Kare Schultz Photo: PR
Kare Schultz Photo: PR
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