Israel’s Leumi Said to Weigh Cutting More Than 10% of Jobsby
Lender has drafted plans to cut about 1,400 positions
Leumi plan would need to be approved by Bank of Israel
Bank Leumi Le-Israel Ltd., Israel’s second-largest lender, has drafted a five-year plan to cut more than 10 percent of its workforce, a person with knowledge of the matter said.
The plans calls for the bank to eliminate about 1,000 positions in the first year and about 100 positions each year thereafter, according to the person, who asked not to be identified because the talks are private. Leumi has discussed its intentions with the Bank of Israel, which must approve any such proposal, the person said.
Leumi is formulating an efficiency plan, a company spokesman said, adding that the deliberations are still ongoing. Any job-cutting plan must also get approval from Leumi’s workers union. A Bank of Israel spokesman declined to comment.
Bank Leumi shares rose as much as 1.2 percent on the news and gained about 0.4 percent as of 5:11 p.m. in Tel Aviv.
With record-low interest rates blunting revenues, Israeli banks have been forced to adopt cost cutting measures to protect their profits. Israel’s Supervisor of Banks Hedva Ber had in December requested new so-called efficiency plans to slim down the nation’s banks and reduce costs to consumers. Ber said she would lend support to such programs, offering leniency in capital adequacy requirements.
Leumi employed 12,528 people at the end of last year, according to its annual report. The bank had cut 1,000 jobs between 2012 to 2014, and is in the midst of reducing another 1,000 by the end of 2017.