Babylon fires over third of workforce


The Internet services company is laying off 15 employees.

A steep drop in revenue at Internet company Babylon Ltd. (TASE:BBYL) is leading to more changes. Babylon is laying off 15 employees, more than a third of its staff. Controlled by chairman Noam Lanir, the company notified the Tel Aviv Stock Exchange (TASE) today that it was making organizational changes.

Babylon said, "At this time, company management is focusing on finding projects and new technologies, as part of its strategy of changing its core business, the sectors it focuses on, and its future development." As part of this decision, the board of directors approved a downsizing of the company's search and distribution activity, and making "adjustments in structure, personnel, and the company's technological and business leadership team." Babylon's main activity is Internet marketing and advertising and distribution of various advertiser's software and products. The company trades at a NIS 115 million market cap. A month ago, it announced the sale of its original activity - translation software and organizational information retrieval activity - for only $2.5 million.

Exactly one year ago, in late October 2013, the Babylon share plummeted 65% in a single trading day, after Internet giant Google, which had been responsible for most of Babylon's revenue and profits, announced that it did not intend to renew its agreement with the company. The company then experienced a drop in its activity with Yahoo, its dominant customer after the termination of its activity with Google.

Babylon's revenue totaled NIS 81.3 billion in the first half of 2014, compared with NIS 341 million in the corresponding period in 2013, and its total profit shrank by 69% to NIS 23.8 million.

Together with its business results, Babylon also announced the distribution of a NIS 125 million dividend to its shareholders. Lanir said, " After a long process of assessing the alternatives facing us for using the accumulated cash balances, we believe that the good of the shareholders right now requires the distribution of a dividend, rather than making other risky investments that are disproportionate to the company."

Published by Globes [online], Israel business news - - on October 26, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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