Oil Refineries Ltd. (TASE:ORL) today announced that it will scale back services provided by contractors, effective immediately, affecting 1,000 contract workers at the company.
Oil Refineries recently notified contract workers, ranging from pipe layers to welders, that it was reducing their work as part of the company's streamlining and cost-cutting measures. The cutbacks are being coordinated with the company's workers committee, in order to minimize the blow to the company's employees, 240 of whom will lose their jobs.
Most of the contract workers at Oil Refineries also work at other companies, but they will nonetheless be affected by the move. "There are no layoffs, but work reductions," said a source familiar with the subject.
Oil Refineries said in response, "Oil Refineries, with the full cooperation of management and the workers committee, has begun reducing the use of external services and maximizing work by company employees. This step is part of the streamlining measures that the company is now undertaking. These measures include scaling back headquarters and work and reducing their costs."
Oil Refineries, controlled by Israel Corporation (TASE: ILCO) and Israel Petrochemical Enterprises Ltd. (TASE:PTCH), lost $40 million in the first half of 2013 after losing $198 million in 2012. The company owes bondholders NIS 1.8 billion on top of its bank debt. Investors are worried that without a capital injection, the company will default on NIS 370 million in bond interest and principle payments at the end of the year.
Published by Globes [online], Israel business news - www.globes-online.com - on November 17, 2013
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