Bank Hapoalim’s management announced this afternoon at a special press conference that it was laying off 900 employees - about 9% of its workforce. 700 will be laid off at the bank's branches, and 200 at its head office. Severance pay will be 230% of the legal minimum for younger employees, while employees aged 56 and over will receive full pension rights.
The move will cost the bank NIS 580 million, apparently to be spread over the fourth quarter of this year and the first quarter of 2003. This is a significant amount in relation to Bank Hapoalim's revenue and profit, and will have a material effect on its results. The bank estimates the gross annual saving from the staff cuts at NIS 277 million. This means that the payback will be felt after two years.
Besides the staff cuts, Bank Hapoalim also announced a 7% salary cut for senior management for 2003, similar to the cut implemented this year.
The bank’s management said it was continuing its efficiency program also in 2003, because of the ongoing economic slowdown and after an examination of its requirements.
In the last few weeks, the bank’s management held a number of meetings with workers committees around the country, as well as with various management levels. At the meetings, the bank explained why it was essential to continue with its efficiency drive, and at an even greater pace in 2003. Workers committee sources said the bank had initially wanted to fire 2,000 employees, and had arrived at the lower number after protracted negotiations with the commitee lasting eight months.
The Bank Hapoalim group employs about 13,000 workers. About 9,800 people work at the bank itself.
Published by Globes [online] - www.globes.co.il - on 17 December, 2002