Teva Pharmaceuticals (NYSE: TEVA ) announced today its acceleration of its cost reduction program, with plans to lay off around 5,000 workers in 2014 to help pull $2 billion in annual savings by 2018. The company had originally expected to save $1.5 billion to $2.0 billion annually.
The decision comes as an add-on to its previous downsize plans, originally announced in December 2012. In addition to divesting non-core assets, focusing on efficiency, and cutting down on excess capacity, the company's layoffs will reduce its global workforce by approximately 10%, allowing Teva to focus on its generic business and core R&D programs.
President and CEO Jeremy Levin said in a statement:
Teva is managing its operations to achieve high levels of effectiveness in the short term, while pursuing opportunities for the long term. The accelerated cost reduction program will strengthen our organization while improving our competitive position in the global marketplace. We understand that this may be a difficult time for our employees and are committed to act with fairness, integrity and respect, and provide support during this time.
Teva expects to snag $1 billion in savings by the end of 2014, and estimates its overall restructuring costs to clock in around $1.1 billion. The company reconfirmed its 2013 non-GAAP revenue range of $19.5 billion to $20.5 billion, and non-GAAP adjusted earnings at $4.85 to $5.15 per share.