Teva Pharmaceutical Industries faced harsh criticism Monday over its plan to dismiss 700 to 800 of its employees in Israel. The move, announced last week, is part of a company decision to cut 5,000 jobs -- 10 percent of its workforce worldwide -- accelerating a cost-cutting plan meant to save $2 billion a year in operational costs by the end of 2017.
Teva said most of the 5,000 job cuts would come by the end of 2014 as the company looks to trim assets that no longer fit its core business or are not critical to its future.
"The accelerated cost-reduction program will strengthen our organization while improving our competitive position in the global marketplace," Teva's CEO Jeremy Levin said.
The news of the planned layoffs, which coincided with a similar plan to lay off 240 employees at the Haifa-based Oil Refineries, has sparked concern of a domino effect that might be detrimental to the Israeli economy.
Speaking at the Knesset at the start of its winter session, Finance Minister Yair Lapid told the plenum on Monday that he had spoken with Levin and expressed his "dissatisfaction" with the move. The finance minister said he had asked Levin to reduce the number of employees who would be dismissed.
"I expressed my dissatisfaction and reminded [Teva's management] that the relationship they have with the government is two-sided. In the past, Israeli governments have afforded Teva, and other companies, large tax benefits. I'm not at ease with this situation, and if I had been finance minister at the time the decision would have been different," Lapid said.
"The Finance Ministry is currently in the midst of a difficult negotiation with Teva about this very thing, but in any case I made it clear that Teva is committed to listening to what we have to say on the subject."
Lapid said the company had yet to finalize its layoff plans: "Teva has 47,000 employees worldwide and the scope of the layoffs will not be uniform [between countries]. Teva will not pursue unilateral steps. It will keep us, as well as the Histadrut [labor federation] informed, and we will do everything we can to minimize the impact this move has on the workers."
Opposition Leader Shelly Yachimovich (Labor) called Teva's plan "a mass terror attack," saying that given the near-zero taxes the pharmaceutical giant pays the state, the plan was an "act of cannibalism."
She urged Prime Minister Benjamin Netanyahu "to treat this issue with the same gravity you have lent the Iranian threat ... You can have a direct and immediate impact on the matter."
Netanyahu commented on the matter Monday saying that "the planned layoffs in Teva are regrettable, but you have to remember that the Israel has one of the lowest unemployment rates in the Western world."