by Keren Setton
JERUSALEM, Dec. 19 (Xinhua) -- Israeli pharmaceutical firm, Teva, announced late last week it was to fire 14,000 workers worldwide, approximately 25 percent of its workforce, in an attempt to save the company from falling part completely.
In Israel, a total of 1,700 workers are expected to be laid off over the next two years. This will be the largest single layoffs in the history of the country.
It is estimated that at least twice that amount of laborers will lose their jobs, as service providers for Teva in the country will also take a hit.
In response to the announcement of massive personnel cutbacks, Israel's national trade union held a nationwide strike on Sunday. Flights were canceled, hospitals worked with reduced staff and other critical services were suspended for half a day.
Teva is the largest generic drug firm in the world. In recent years, it suffered major setbacks that led up to this crisis. It's share price in the last two years has spiraled downwards with a slight improvement in recent months.
This improvement seems to be related to the appointment of a new CEO for the firm, Kare Schultz, a Danish business executive.
For many Israelis, who see Teva as a source of national pride, the presence of a foreigner at the helm of the company makes him less sentimental to local laborers. However, with the firm in such a crisis, it seems cutbacks are a measure long called for.
Speaking at a weekly cabinet meeting, Israeli Prime Minister Benjamin Netanyahu addressed the issue.
"It started as an Israeli company and we want it to remain as an Israeli company," said the Israeli premier.
"Such a firm brings very high added value to the Israeli economy," said Shlomo Maoz, an Israeli economist who has held leading positions in private firms and several public service positions.
"It is very important that it stays Israeli and that it's research base stays in Israel," Maoz told Xinhua.
But with Israel's economy in robust shape and the unemployment rate at a comfortable 4.2 percent low, it seems the market will be able to handle the blow and workers will be able to find jobs.
There are sectors in the Israeli market which are desperately looking for workers.
According to Gilad Alper, head of Research at Excellence Nassuah Trust Company, the Israeli hype over the massive layoffs, although large by Israeli proportions, is over-exaggerated.
"Every year about 80,000 people in Israel lose their jobs, they just find other jobs," Alper told Xinhua. "It's not anything that everyone should go nuts about and certainly does not justify in any way shape or form, any type of state intervention."
Members of the Israeli government are now debating whether to provide a safety net for the Teva employees expected to lose their jobs. Although Teva being a private firm, the country is not obligated to do so.
Netanyahu and Finance Minister Moshe Kahlon are scheduled to meet with Teva CEO Schultz today.
According to media reports, the Israeli leader is going to ask Schultz to close plants in other locations such as Ireland instead of in Israel.
Regardless of the Teva crisis, the small country retains a solid position in the global pharmaceutical and biomed market.
"Israel is in a good place, there are other Israeli companies and there is great potential, but a lot of capital is needed. After new medicines are discovered, plants need to be properly managed and maintained," Maoz said, adding this will keep Israel a competitive player in the market.
However, towards the end of 2017, numbers supplied by Israel's Central Bureau of Statistics show a decrease of almost 40 percent in pharmaceutical exports.
The sharp plunge may be attributed to large reduction in generic drug prices, especially in the United States.
Teva, which has been struggling for over two years, is Israel's largest exporter and currently paying the toll of this nose-dive.
