Cellcom to lay off 700


The company's mobile phone rival Pelephone has already announced 400 layoffs due to the troubled state of Israel's mobile phone sector.

Israeli telco Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) is set to implement a streamlining plan in which the company plans laying off 700-800 employees. As part of the plan, Cellcom has hired Deloitte as financial consultants to support the streamlining measures. The plan will not be published until next month after the Jewish holidays but the workers committee is alert to management's intentions. The workers committee has yet to decide what protest measures it will take and is waiting to saee the details of the plan.

Cellcom's streamlining program is part of a broader plan presented to investors, which sees the TV sector and Internet as the main engines of growth due to the troubled nature of Israel's mobile phone sector, which has little chance of growth in the near future.

Cellcom finds itself at a critical juncture and expects to lose NIS 100 million in 2019. The company's rivals are likely to come close to such losses. Cellcom is also contemplating raising funds through a public offering ahead of 2020 when it will be required to repay some of the bonds that it has raised. However, the company's share price is trading very low, and it is questionable as to whether any public offering could raise sufficient capital.

Cellcom's rival Pelephone Communications Ltd. is laying off 400 people as part of its merger with parent company Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ), and is embroiled in a struggle with its workers committee, which is striking operations.

Published by Globes, Israel business news - en.globes.co.il - on September 23, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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