BICOM

Israel’s political leaders have expressed concern following the announcement that Israeli global pharmaceutical giant Teva intends to make significant redundancies.

Last week, Teva said that it would fire five thousand employees worldwide, a tenth of its workforce, as part of “steps to accelerate the reduction of costs and to optimize its structure and processes.” Although Teva CEO Jeremy Levin commented, “We cannot yet say what will happen in Israel,” media reports speculate that approximately eight hundred Israeli workers will lose their jobs by the end of 2014.

The announcement has caused particular concern, as Teva is one of several large companies which has received significant tax breaks and benefits from Israel’s government during the past few years. Globes reports that Teva currently pays a zero tax rate under the Law for the Encouragement of Capital Investment, while Haaretz says that the tax authority has agreed that Teva can pay just fifty to sixty per-cent of the tax owed on so-called trapped profits. Such benefits were presumed to be conditioned on the continued employment of Israelis and so the planned redundancies are viewed by some as reneging on the agreement.

Finance Minister and Yesh Atid leader Yair Lapid said yesterday that he had expressed his disappointment over the situation during a meeting with Levin. He said, “I reminded the management of Teva that their relations with Israel are double-sided… Past governments had given Teva and other companies large tax benefits. Teva is committed to listening to what we have to say on the subject.” Meanwhile, Labour Party leader Shelly Yachimovich was even more candid on the issue during a speech to the Knesset yesterday, saying “Eight hundred families will now find themselves in a new reality of despair and poverty. It is a massive ‘terror’ attack.”

Israel Radio news reports this morning that chairman of the Histadrut workers union Ofer Eini will meet this afternoon with Teva CEO Levin.