Teva Pharmaceutical Industries Ltd. announced a new leadership structure Monday, days after news reports in Israel cited unnamed sources as saying the Petah Tikva, Israel-based company plans to cut 20 percent of its workforce, mostly in Israel and the U.S.

The new corporate organization, which becomes effective immediately, aims to “achieve better commercial focus and drive value creation,” according to a company statement.

“Teva is taking decisive and immediate action to address external pressures and internal inefficiencies,” Kåre Schultz, Teva’s president and CEO, said in explaining the move. “Our new company structure will enable stronger alignment and integration between R&D, operations and the commercial regions, allowing us to become a more agile, lean and profitable company.”

As a result of the changes, Michael Hayden, the head of R&D; Rob Koremans, president and CEO of Teva’s Global Specialty Medicines; and Dipankar Bhattacharjee, president and CEO of the Global Generic Medicines Group will retire from Teva, effective December 31, 2017.

In Monday’s announcement, Schultz did not specifically address Israeli press accounts of more looming layoffs at the company, which reported deep Q3 losses as its generic drug profits fell to $619 million from $982 million in the quarter ending Sept. 30, 2017 with sales down to $3.01 billion from $3.26 billion.

The company had blamed the poor results on challenging market dynamics, including pricing declines resulting from customer consolidation into larger buying groups and accelerated FDA approvals for additional generic versions of competing off-patent medicines. It specifically cited earlier than expected competition from generic versions of Copaxone, a leading multiple sclerosis therapy.

In early October, the FDA announced approval of Mylan’s generic version of Copaxone, driving Mylan’s stock up 16 percent on the news, while Teva’s shares plummeted by 15 percent at the time.

Multiple reports surfacing as the U.S. entered the long Thanksgiving holiday period last week placed the newly anticipated job cuts at around 4,000 globally, with 25 percent from Israel-based operations and roughly 10 percent in the U.S. Workers are expected to receive the layoff notices within the next few weeks. The reports indicated that the current round of job cuts would be in addition to the deep cuts announced in mid summer.

According to Israel’s Ynet news service, Schultz, who took over the helm of Teva in September, earned a reputation for deep cutbacks in his previous position as CEO of Lundbeck, where he terminated some 17 percent of the workforce shortly after taking office.

“The new management team will position Teva for turnaround in the short to medium term,” Schultz said in Monday’s announcement. “We are already working on a detailed restructuring plan for Teva and will share it in mid-December. It remains our absolute priority to stabilize the company’s operating profit and cash flow in order to improve our financial situation.”

New Structure

The commercial business will no longer have two separate global groups for generics and specialty medicines, and will be integrated into one commercial organization, operating through three regions — North America, Europe, and Growth Markets. Each of the regions will manage the entire portfolio — including generics, specialty, and OTC — with full end-to-end P&L accountability. Some of the former global units will be integrated into the new structure, while others will be made redundant.

The former Generic R&D and Specialty R&D organizations will be combined into one global group with overall responsibility for all R&D activities — generic, specialty, and biologics — maximizing ROI through better focus and efficiency.

A newly formed marketing and portfolio function will be responsible for overseeing the interface between regions, R&D, and operations throughout all product lifecycle stages, and optimizing generic and specialty portfolios across the therapeutic areas.

The new structure will enhance alignment and integration among Teva’s global operations, the commercial regions, and R&D. The portfolio function will increase productivity and simplify the organization, according to the company.

The commercial structure will rely on one leaner supporting organizational infrastructure that includes Finance, Legal, HR, and Global Brand & Communications.

New Executive Management Team

Michael McClellan was appointed executive vice president, chief financial officer and will oversee the finance group, business development, investor relations, and information technology. Previously, he served as interim CFO and as SVP & CFO Global Specialty Medicines. Prior to joining Teva, he was the U.S. CFO at Sanofi.

Hafrun Fridriksdottir was named executive vice president, Global R&D. Previously, she served as president of Global Generics R&D. Prior to joining Teva, Hafrun served as senior vice president and president of Global Generics R&D at Allergan plc.

Brendan O’Grady takes over as executive vice president, North America Commercial. O’Grady has previously served as chief commercial officer, Global Specialty Medicine, as interim head of Teva’s European specialty business, president and CEO for Teva’s North America generics business, and as VP U.S. Market Access and Reimbursement.

Richard Daniell was appointed executive vice president, European Commercial, after having served as president and CEO, Teva Generics Europe.

Gianfranco Nazzi was named executive vice president, Growth Markets Commercial. He has previously served as president and CEO of Growth Markets at the Global Generic Medicines group, and prior to that he has served as senior vice president, Specialty Medicines Europe.

Sven Dethlefs becomes executive vice president, Global Marketing & Portfolio. He previously served as global head of Respiratory Medicines and as chief operating officer, Teva Global Operations.

All appointments are effective immediately, while the retiring executives are expected to stay with Teva to support the transition until the end of the year.

(Sources: Teva Pharmaceuticals Industries Ltd.; Ynet News; FirstWord Pharma; Business Wire)