Teva’s Pursuit of a $2 Billion Exit From TAPI Ends With Another 250 Job Cuts

Teva failed to find a buyer for its active pharmaceutical ingredients division, TAPI, and employees will pay the price. The pharmaceutical giant announced today that it is laying off 250 workers in Israel, about 40% of the division’s local workforce. TAPI currently employs about 4,100 people worldwide, including about 650 at its main site in Neot Hovav. The plant has already undergone numerous efficiency and cutback plans over the years, and in the past it employed only about 1,000 workers in Israel. Under agreements reached with the workers’ committee, the layoffs will be spread over about two years.

This is another step in the broad efficiency plan led by Teva CEO Richard Francis. About a year ago, the company laid off about 3,000 employees worldwide, including about 300 in Israel. That move represented a cut of about 8% of Teva’s global workforce, which currently numbers about 33,000 employees, compared with 36,000 at the end of 2024. The plan’s goal is to bring the company to an operating profit margin of 30%. Since taking office, Francis has identified TAPI as a business that is not at the core of Teva’s operations. Accordingly, the division was put up for sale in 2024.

At the start of the process, Teva estimated that it could receive about $2 billion for the business. The expectation later fell to about $1.5 billion, but even at that price no buyers were found. In 2025, after the deadline set by Francis to complete the process passed, Teva said it would reexamine the division’s future. Meanwhile, in 2024 Teva recorded a series of goodwill write-downs related to TAPI totaling about $1.3 billion. Following those write-downs, only about $200 million in goodwill remained on the company’s books for the business.

At Teva, they say the layoffs in Neot Hovav are a continuation of a global efficiency process that began in TAPI last April. As part of that move, workers were also laid off in Italy. Indeed, while at the start of the sale process Teva reported about 4,300 employees in TAPI, it now employs only about 4,100 people.

TAPI’s business is divided into two main areas, supplying active ingredients, API, to Teva itself, and selling to external customers. The division markets about 350 active compounds, mostly intended for the production of generic drugs, and is considered one of the three largest players in the world in the field of active pharmaceutical ingredients. The Neot Hovav site is one of 13 TAPI manufacturing sites still operating worldwide, most of them in Europe. In recent years, Teva has reduced its footprint and sold several sites, including a manufacturing plant in Italy.

The coronavirus crisis made the active ingredients sector more strategic for the global pharmaceutical industry, after supply chain disruptions exposed the high dependence on concentrated production in certain countries. At the same time, competition from China and India has grown significantly, leading to erosion in the industry’s profitability and a slowdown in TAPI’s growth rate.

Beyond TAPI’s relative weakness in performance, the move also fits Teva’s broader strategy under Francis, reducing exposure to markets based on generic drugs and directing resources toward original and innovative medicines, which are considered more profitable and to have higher growth potential. Accordingly, Teva said today that the Neot Hovav site is expected to focus more in the future on peptide production, alongside expanding activity in vitamins and additional innovative products.

Teva had hoped that one of the major private equity funds would lead a consolidation move in the industry by merging several active ingredients players under one platform. Such a move could have justified the purchase of TAPI, but so far that scenario has not materialized. The global active ingredients market is estimated at about $85 billion, but it is a relatively moderate-growth market, at about 6% to 7% a year. As a result, TAPI’s revenues have not shown significant growth in recent years, and in some years the volume of activity even declined.

For years, TAPI generated annual revenues of a little over half a billion dollars. However, after the significant goodwill write-down carried out in 2025, Teva stopped separately publishing the division’s results. Along with the layoff announcement, Teva stressed that it continues to review on an ongoing and strategic basis the possibility of selling TAPI’s global operations, in line with market developments and opportunities.