Teva Announces Major Restructuring and Job Cuts Amid Continued Growth

Teva Pharmaceutical Industries Ltd. has unveiled plans for a significant restructuring initiative, including substantial job cuts, as the company enters the "Acceleration Phase" of its "Pivot to Growth" strategy. The move comes as the Israeli-American pharmaceutical giant reports its ninth consecutive quarter of growth, showcasing a notable turnaround under CEO Richard Francis's leadership.

Restructuring and Cost-Saving Measures

Teva aims to save approximately $700 million by 2027 through a comprehensive restructuring plan. As part of this initiative, the company will reduce its global workforce by around 8%, affecting approximately 3,000 employees out of its current 37,000-strong staff.

The restructuring efforts extend beyond workforce reduction, with Teva focusing on modernizing its operations through the implementation of artificial intelligence and consolidating its supplier network to optimize procurement processes. Additionally, the company plans to streamline its manufacturing footprint, reducing the number of production sites from the current 35 to fewer than 30 by 2027.

CFO Eli Kalif emphasized the company's ongoing efforts to rationalize its manufacturing operations, stating, "We're constantly looking on how we're able to rationalize our manufacturing footprint."

Financial Performance and Growth Drivers

Despite the restructuring announcement, Teva reported strong financial performance for the first quarter of 2025. The company posted global sales of $3.9 billion, representing a 5% increase in constant currencies compared to the same period in 2024.

CEO Richard Francis attributed much of this growth to Teva's key trio of branded medicines:

1. Austedo
2. Ajovy
3. Uzedy

Collectively, these products experienced a 39% growth in Q1. Teva projects full-year sales for Austedo to range between $1.95 billion and $2.05 billion, while Ajovy and Uzedy are forecasted to generate approximately $600 million and $160 million, respectively.

Future Outlook and Challenges

While Teva maintains a positive growth trajectory, the company has slightly adjusted its overall sales guidance for the year. The new forecast ranges from $16.8 billion to $17.2 billion, down from a previous high-end estimate of $17.4 billion.

The company noted that current import tariffs implemented by the Trump administration are expected to have an "immaterial impact" in 2025. However, Teva remains cautious about potential pharmaceutical-specific tariffs that could be introduced in the future.

As part of its ongoing strategic initiatives, Teva continues to explore the potential sale of its active pharmaceutical ingredient (API) business. Francis confirmed that the company is "still in advanced discussions" regarding a potential transaction, though specific details remain undisclosed.