Bezeq sets out worker retirement plan that will slash 2018 profit
Plan envisages early retirement of 337 workers at a cost of NIS 512 million ($136m); 2018 net profit will be cut by NIS 464 million, filing says
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
Israel’s Bezeq Israel Telecom, the nation’s largest telecommunication firm, said Monday its board of directors has approved a cost-cutting plan for 2019 that envisages the early retirement of 337 workers and will slash the firm’s 2018 annual profit.
The plan will cost Bezeq some NIS 512 million ($136 million), the company said in a filing to the Tel Aviv Stock Exchange.
The expense will be in addition to the NIS 90 million the company set aside in the first and second quarters of this year for the early retirement of employees, the filing said.
The total expenses of the plan are expected to cut 2018 net profit by NIS 464 million, the company said. Last month, the company forecast a net profit of NIS 1 billion for 2018.
The job cuts at Bezeq’s fixed line division amount to 3 percent of the company’s workforce and could lead to additional cuts, Barclays analyst Tavy Rosner said, according to Reuters.
The plan is a bid by the new management team at nation’s largest telecommunications firm, with fixed-line, satellite TV, internet and cellular operations, to get the company back on track after it became embroiled in investigations regarding the operations of its controlling shareholder, senior executives, who have now been replaced, and the Communications Ministry.
Bezeq shares were trading 1.3% lower at 3:16 p.m. in Tel Aviv, bringing its decline in the past 12 months to 20%, compared to a 7% rise in the same period of the blue-chip TA-35 benchmark index.
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