New Jersey's bait worked: After promise of $40M in incentives, Teva is moving its HQ
It’s official — the carrot New Jersey dangled in front of Teva has sealed the company’s fate. It will move its US headquarters to Parsippany-Troy Hills, NJ, after the state agreed to give the company $40 million in tax credits, New Jersey Gov. Phil Murphy said in a statement today.
To make the move, Teva is expanding its existing Parsippany-Troy Hills location to encompass 350,000 square feet and expects to “transfer and create 843 jobs and retain 232 existing positions.” The median annual wage associated with the more than 1,000 positions is $128,073.
Teva, of course, is undergoing a draconian shakeup under new CEO Kåre Schultz, who has outlined general plans to carve out $3 billion in spending at the Israel-based company. That led to WARN notices in Pennsylvania in January covering more than 200 jobs that are being axed in and around their current headquarters in North Wales, PA. And more may follow.
Altogether Schultz plans to close dozens of facilities around the world, shutting nearly half of the 80 sites Teva owns. And 14,000 jobs are on the chopping block.
The tax cuts New Jersey dangled in front of Teva were conditional on preserving 1,000 jobs. New Jersey believes that relocation will be worth a net benefit of $247 million over 20 years — which is more or less infinity in the pharma business.
According to the Philadelphia Business Journal, the company has about 2,000 staffers scattered around Pennsylvania.
“While Teva will retain a significant presence in Pennsylvania, reducing the number of sites supports our drive to continue to improve productivity and efficiencies,” said Brendan O’Grady, executive VP and head of North America Commercial.
O’Grady didn’t note how many people Teva will fire in North Wales, or given the choice of moving to Parsippany — a 90-minute drive from North Wales.
The New Jersey Economic Development Authority (EDA) approved tax breaks in June worth $4 million a year for each of the next 10 years for Teva in order to protect “jobs at risk” in a “priority area.” New Jersey has targeted biotech jobs as a growth area.