The consequences of the war are growing on the economy. Fox Group (TASE: FOX), one of Israel's leading retail fashion chains, today announced that it is putting 30%-50% of employees on unpaid leave. Most of the employees being put on unpaid leave are staff in stores, while employees in headquarters who are not being put on unpaid leave will only receive 80% of their salary.
At the same time, Fox owner and CEO Harel Wizel and other senior executives at the company including chairman Avi Zeldman and Retailers (TASE: RTLS) CEO Tomer Czapnik will take a 50% pay cut for 30 days.
This is the first such major move by a large business company to put employees on unpaid leave, while the state, unlike during the Covid pandemic, is so far not implementing any measures to support employees on unpaid leave.
Fox notified the Tel Aviv Stock Exchange (TASE) that "Since the start of the Swords of Iron War the Group's scale of activity in Israel has been reduced significantly. The Group is warning that there might be substantial negative impact on its fourth quarter results this year. The scope of the influence, as in other groups effected, cannot be estimated."
Fox, together with Retailers from the group, which has published a similar report, has begun telling employees and managers in stores and headquarters about being put on unpaid leave.
Department store chain Hamashbir Lazarchan has said it is putting 40% of employees on unpaid leave for the next 30 days.
The Association of Commercial Chains in the Chamber of Commerce said that after the announcement by Fox and Retailers, "Since the assistance program published by the Israeli government does not address employees salaries for most of the companies in the economy, and out of sincere concern for our employees, we are forced to announce that hundreds of retail chains have begun to send employees on unpaid leave. We call on the government of Israel to immediately provide a response for employees' salaries, otherwise over 100,000 employees of commercial chains out of 300,000 employees, will be on unpaid leave as of today."
Published by Globes, Israel business news - en.globes.co.il - on October 22, 2023.
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