Cellcom Israel Ltd., the country’s largest cellphone provider, on Tuesday announced its plans to minimize its workforce and cut payments to suppliers as part of a comprehensive restructuring plan.
The company said it hopes the plan will bring it back to profitability by the end of 2020, after several quarterly losses. After the announcement, the company’s stock spiked, growing by 14.3% by the end of the day, signaling the market support for Cellcom’s plan.
Following the announcement, Cellcom’s workers went on an improvised strike, saying the layoffs are unacceptable.
Cellcom CEO Nir Sztern said he “hopes the employees’ representatives will take a responsible stance towards the company’s plan and the need to bring it back to a safe financial footing, for the benefit of its employees and shareholders.”
He went on to promise the workers who will stay with the company through the restructuring plan a “good, stable job that pays well.”
The company, which in the past dominated the Israeli cellular market along with two other companies, has been under increasing financial pressure since the cellular reform was carried out in 2010. New companies have since entered the market, slashing prices and forcing the established firms to do the same.
Some experts have argued that the extremely low prices are unsustainable and will eventually cause one of the firms in the market to go out of business. Cellcom’s recent trouble may indicate they were right, though the restructuring of the company could prove a successful lifeboat for the company.
