The logo of the Bezeq Israeli Telecommunication Corp Ltd, the country’s largest telecom group, is seen outside their headquarters in Tel Aviv, Israel on June 21, 2017. REUTERS/Amir Cohen
TEL AVIV (Reuters) – Bezeq Israel Telecom said on Monday its expected 2018 annual profit would fall by almost half after the approval of the cost-cutting plan to retire 337 employees asked for a charge of 512 million shekels ($136 million).
The costs are in addition to 90 million shekels reserved in the first and second quarter of 2018, early retirement, Israel’s largest telecom group said in a statement.
In total, these costs are expected to decrease by 2018 net profit of 464 million shekels, Bezeq said. The company had repeated a 1.0 billion shekel forecast last month.
The job reductions in Bezeq’s fixed line division in the amount of 3 percent of the company, the employees and may pave the way for additional cuts, Barclays analyst Tavy Rosner said.
“We estimate that there is significant room to reduce the workforce at Bezeq the other three divisions,” said Rosner, who estimated the company can cut 19 percent of the workforce.
“Today is the early retirement falls within the existing agreements with the unions and we believe that the company will be able to negotiate additional savings with the unions.”
Bezeq shares fell by 0.8 per cent in the morning trade, compared with a 0.2 percent gain in the Tel Aviv 35 blue chip index.
Bezeq has undergone a shake-up of the management and the board of directors the past year in the wake of an investigation into securities of the company and the former officials who, since the dismissal.
In August, Bezeq said it had plans to merge his mobile phone, satellite-TV and Internet service provider units in one company, in anticipation of approval, as part of efforts to save costs.
Reporting by Tova Cohen; Editing by Steven Scheer and Kirsten Donovan