Isracard is the latest company to engage in blood-letting as world economies prepare to face a looming recession.
The credit card firm announced its board of directors approved an efficiency plan on Tuesday which will include laying off 250 employees — 12 percent of its work force, albeit in cooperation with its workers’ union.
“In accordance with the group’s strategy and developments in the competitive market in which we operate, we need to make the company more flexible, efficient and focused so that Isracard has a significant competitive advantage and leads the market,” Isracard CEO Ran Oz said in a statement.
“Unfortunately, as part of this process, reducing the number of employees is a necessary reality.”
The move to streamline procedures, downsize corporate units and change the company’s organizational structure is expected to come with a pre-tax NIS 30-35 million ($8.7-10.1 million) price tag in employee severance and compensation.
Isracard said, however, that the plan will ultimately save the company NIS 55-65 million annually.
“The first fruits of the strategic plan are already visible on the ground, in the form of double-digit growth in credit portfolios for private customers and the business sector, a decline in various operating expenses and a focus on business,” the company said in its statement.