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Teva to cut workforce 25%, suspends dividend; shares up 3% premarket

  • Teva Pharmaceutical Industries (NYSE:TEVA) announces its restructuring plan. Key points:
  • Workforce to be reduced 25% (14K positions globally).
  • Dividend suspended on ordinary shares and ADSs. Dividends on mandatory convertible preferred shares will be evaluated on a quarterly basis.
  • No annual bonuses will be paid this year.
  • Organizational structure to be simplified via reducing layers of management, streamlining processes and divesting/closing certain R&D facilities.
  • Total cost base to be reduced $3B (from a base of $16.1B this year) by the end of 2019. More than half should be achieved by the end of next year.
  • Restructuring charge of $700M to be recorded in 2018.
  • 2018 guidance will be provided in February with the release of 2017 results. Color on longer-term strategic direction will come later in 2018.
  • Shares are up 3% premarket on modest volume.
  • Update: In the conference call, management stated that it had no plans to issue additional equity.

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