The southern city of Kiryat Gat on Wednesday announced it was firing 320 municipal employees as part of a financial recovery plan.
The municipality has the highest annual deficit of any local government in Israel, slated to reach NIS 135 million ($39 million) in 2019.
In a Facebook post announcing the austerity measure, the city said the layoffs would take place on a last-in-first-out basis, with the most recent employees being the first to be let go.
The announcement also said that early retirement was no longer an option for any Kiryat Gat municipal employees.
Mayor Aviram Dahari had pushed for a recovery plan based on letting go a large number of municipal employees, but the employees’ labor union had successfully blocked the move until now. Kiryat Gat, a city of some 60,000, said Wednesday it was in talks with the national Histadrut labor federation over the layoffs.
City officials told the Ynet news site the firings were necessary due to the large number of new apartment buildings under construction in Kiryat Gat that were “causing a budget shakeup.”
The officials said the municipality was dealing with “enormous building and development challenges” in its efforts to become an industrial and economic hub in southern Israel.
The announcement comes weeks after US tech giant Intel reportedly delayed its plans to invest $5 billion (NIS 19 billion) in expanding its Kiryat Gat production plant, where it produces and develops some of its most advanced computer chips.
Intel’s plans to expand operations in Kiryat Gat, which was expected to bring revenue and hundreds of jobs to the city, was praised by Prime Minister Benjamin Netanyahu and other lawmakers.