Bank Leumi (TASE: LUMI) today reported to the Tel Aviv Stock Exchange (TASE) that its board of directors approved a streamlining plan yesterday expected to result in voluntary retirement for 700 employees, with enlarged compensation of up to 270% for them.
Thank sto the relaxation of capital requirements included in the Bank of Israel's guideliens on streamlining published in December 2015, the voluntary retirement program offers very beneficial terms. The period set by Bank Leumi for joining the program is short.
The current program follows the one in 2012-2015, in which the number of jobs at the bank was cut by 1,400. The current program is expected to cost NIS 400 million.
In order to put its cost-cutting plan in motion and gain the support of the bank's workers and the workers' committee, Bank Leumi management agreed with the workers' committee on payment of a one-time bonus. The bonus will be paid only to employees covered by the collective work agreements, and will to apply neither to those employed on personal contracts nor to bank officeholders.
Along with the report to the TASE, Bank Leumi CEO Rakefet Russak-Aminoach stated, "The streamlining plan is another essential measure for adapting Bank Leumi to the banking of tomorrow. The dramatic changes in the business environment require leading enterprises in general, and banks in particular, to show operating efficiency and managerial flexibility. Bank Leumi is continuing its implementation of this strategy, following the streamlining plans carried out in recent years."
In an official circular sent to Bank Leumi employees, the workers' committee said, "Retirement will be entirely voluntary." Sources on the committee added, "The negotiations almost broke down, because they wanted to give the bonus only to tenured workers, not to both tenured and temporary workers. We insisted. The ones who most need this money are the temporary workers, and we are glad that the bank realized this."
Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016