Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is planning to lay off some of its 7,000-strong staff as part of a cost-saving drive that also seeks to improve competitiveness. The cuts will mostly target production operations in Israel even as it remains unclear the number of staff the company will let go.

Teva Layoff Plans

Teva currently employs about 4,000 staff in Israel most of whom are involved in the production process. The company has already opened discussions with unions representing employees at two of its production sites.

The proposed cuts are part of an ongoing restructuring that seeks to make some of the production sites in Israel efficient, competitive and sustainable for the long term.

“In light of the complex business reality the entire pharmaceutical industry and Teva in particular face, Teva has been implementing in recent years a global reorganization. Large parts of this plan have already been completed in most of the country’s Teva operates,” Teva in a statement.

The world’s largest generic drug maker finds itself in a tight spot amidst spiraling competition in the business of selling drugs. The company has also struggled to pick itself in the industry especially on the completion of the acquisition of Allergan for $40 billion last year.

 Immediate Headwinds

The resignation of CEO, Erez Vigodman plunged the company into uncertainty early this year, a move that has seen the stock underperform the overall industry. Current CEO Yitzhak Peterburg has already warned that the healthcare industry faces ‘huge disruption’ as technology giants resort to pursuing growth opportunities in the industry.

Peterburg is of the opinion that Teva will have to think of new ways to navigate the sector as competition from non-Pharma players continues to grow. Being good and efficient on developing drugs according to the executive may not be enough in guaranteeing a return on investments in future.

Apple Inc. (NASDAQ:AAPL) is one of the company believed to be working on a secretive project that could have a significant impact on the overall industry. Regulatory hurdles is another headwind that Peterburg has warned of, especially on Teva struggling to get a foothold in the Chinese market in the last few years.

Teva stock was up by 0.65% in Friday’s trading session to end the week at $32.64 a share.