Another Israeli icon is hit
The economy ultimately trumps everything. That's life. Supply and demand are the law of the land, even in the 21st century. So are concerns over prices and costs. When stock brokers got word of the decision to lay off some 5,000 Teva Pharmaceutical Industries employees (among them several hundred Israelis) on Thursday, the company's stock prices actually shot up. As the old saying goes, "One's triumph is the other's sorrow." Here you have another law.
The downsizing does make some economic sense. The company's milking cow, Copaxone, will soon no longer be patented and will lose its financial luster.
Teva has yet to identify the next Copaxone. It is doubtful it ever will. Even the most novice economist would tell you that if Teva does not fire several hundred of its employees today, it would have to let an even greater number go in the near future. The Histadrut labor federation is aware of the dire straits Teva is in. It remains to be seen whether it pressures the new management to forgo some of the planned terminations or just let this move go ahead as planned, albeit with minor tweaks.
Truth to be told, those who are going to get the axe and find themselves without a job were not surprised by the move. For quite some time now, for several years, financial experts have been sounding the alarm, telling us that Teva would have to make such a move in the near future. Israel's most popular publicly traded company stopped being part of our national pride.
Teva stock has been a hot commodity among many in the middle class who assumed that Teva would not lose its value. Despite what Teva employees knew and what investors assessed, the company has held on to its iconic stature. The Zionist enterprise has had its share of companies and ventures that were considered invincible but buckled under economic pressure -- the kibbutzim, Solel Boneh and Egged and in the public sector and Israel Discount Bank, the Lodzia textile company and Teva in the private sector. All of them either imploded or had to go through some restructuring.
Although Teva has fared well in the stock market, those who are going to be laid off will feel the pain. The general public is alarmed as well. Teva has long been considered stable and protected, but it could not withstand this earthquake, which came not long after the company was sold to foreign investors. It has already shed its blue and white identity, which was part of its sentimental value and part of the employees' job security.
Even if the legendary Israeli owners were still in charge, they may have very well made this move. But their departure made it convenient to think otherwise. The crisis also begs the question: How long will Teva stay in Petach Tikva before it relocates to some distant U.S. venue?
Accepting the new reality cannot alleviate the pain. Nor can it make the worries go away over another dramatic layoff announcement in the event this current move fails. There is a burgeoning, albeit surreal, desire to cry out, "Where art thou, [former CEO] Eli Hurvitz-"
טעינו? נתקן! אם מצאתם טעות בכתבה, נשמח שתשתפו אותנו