Kåre Schultz, new chief executive officer of debt-plagued Israeli drugmaker Teva, is moving rapidly to make good on his pledge to improve the company’s financial performance and reposition it operationally.

When Teva reveals further details of its new global structure in mid-December, the world’s largest generics producer is expected to announce plans to slash its worldwide workforce by 25% on top of the cuts announced last summer. The total is rumored to affect more than 10% of the US workforce. 

The new structure will combine the drugmaker’s previously separate global groups for generics and specialty medicines into one commercial organization operating through three regional segments – for North America, Europe and Growth Markets. Each of the regions will manage the entire portfolio.

With the realignment, Rob Koremans, currently CEO of Teva’s global specialty drugs, and Dipankar Bhattacharjee, head of generics, will retire after a transition period.  

R&D activities for the two formerly independent segments will also be combined, leaving CSO Michael Hayden without a job.

New members of the Teva executive team are to include Hafrun Fridriksdottir –  up to now head of global generics at Allergan – as executive vice president of global R&D and Brendan O’Grady, Teva’s former chief commercial officer, as head of the North American commercial segment. Richard Daniell, previously president and CEO of Teva Generics Europe, will head the European segment, and Gianfranco Nazzi, president and CEO of Teva’s Growth Markets in the Global Generic Medicines group, will lead the new independent Growth Markets segment.

The drugmaker has also confirmed the permanent appointment of Mike McClellan as chief financial officer.  McClellan, who held the same position at French pharmaceutical producer Sanofi, had been serving in as interim CFO at Teva.

Schultz, who has a reputation for being unafraid to wield the axe, said the new corporate structure will enable stronger alignment and integration between R&D, operations and the commercial regions, allowing Teva to become “a more agile, lean and profitable company."

The CEO said the management team will position the company for a turnaround in the short to medium term, adding that “it remains the “absolute priority to stabilize the operating profit and cash flow in order to improve the financial situation, while being focused on short-term revenue and cash generation.”

Some analysts criticized the realignment plans, with one saying that the new segments could result in less transparency for investors, while another said that staff reductions in finance, regulatory, R&D and human resources could provide longer-term regulatory challenges.

One commentator noted that, in view of its level of debt, Teva doesn’t have many options for ending the misery brought on by overextension, especially as ratings agency Fitch recently downgraded its stock to junk status.

Billionaire Len Blavatnik – the Russian-born US investor whose investment vehicle Access Industries more than a decade ago bought into Netherlands-based Basell and US-based Lyondell, merged the two and accompanied LyondellBasell into bankruptcy –  is rumored to be weighing an investment of up to $3 billion.

In the quarter ending Sept. 30, Teva’s generic drug profits fell by 37% to $619 million and the business’s sales by 7.7% to $3.01 billion. Blamed for the downturn, among other things, was the US Food & Drug Administration’s approval of generic competition for some of the company’s off-patent medicines, including Copaxone, one of the leading multiple sclerosis treatments. In early October, the FDA announced its approval of Mylan’s copy.