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New Jersey attempts to lure Teva HQ with tax incentives

Published on 15/06/18 at 10:17am

Teva has been doing some major global restructuring since Kare Schultz came to the helm of the embattled, Israeli drugmaker. So deep were the cuts in Israel that a general strike briefly shut down most of the country, including its airport and banking services, in December 2017.

Undeterred, Shultz has pushed ahead and expanded those cuts to the North American market, shedding 200 workers from its North American headquarters in Pennsylvania at the beginning of the year.

The fight back has begun in the US to try to prevent more staff from being lost; however, it’s not being led by Pennsylvania but by New Jersey.

The state is offering a 10-year, $40 million tax incentive package for Teva to relocate its headquarters to Parsippany and, in the process, would manage to gain 1,000 jobs from having the company based in the state; the move would create around 800 jobs, combined with the 200-strong workforce currently already in the state.

In another bonus for the state, bringing Teva’s headquarters to the town is estimated to have an economic benefit of $247 million accrued over the next 20 years.

Teva, should it decide to take the opportunity, would move into the 345,000-square-foot plot, whilst shifting its current workforce over from Frazer to the new base.

What could be New Jersey’s gain could well be other states’ losses across North America, particularly Pennsylvania. The company has set itself a target of reducing costs by $3 billion, by selling on some of its facilities and attempting to reduce expenditure on real estate.

The major driver behind reducing costs, however, will be felt at the level of the employees – with some 14,000 jobs looking to be cut away across the entire business and its likely that a number of these will occur in North America.

Ben Hargreaves

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