Bank Hapoalim is working on a wide-ranging plan to streamline its operations and cut hundreds of jobs.

Since most of the bank's employees are party to a collective employment agreement, the bank cannot carry out the dismissals without negotiations; even then it could only lay off staff members without tenure.

The plan includes a reorganization that would merge divisions responsible for similar activities. Some administrative functions would be decentralized, with the elimination of positions and the redistribution of those roles among remaining at its Tel Aviv headquarters staff.

The plan, which would eliminate positions rather than replace highly paid staff with lower paid employees, is expected to achieve big savings, not only in salaries but in costs such as expenses for maintaining offices.

Bank Hapoalim is already considered more efficient than its competitors in the Israeli banking industry.

In the first half of this year, just 62.4% of its revenues were required to cover its operating expenses. By that measure, only Mizrahi-Tefahot, at 58.2%, had more efficient operations. Bank Hapoalim's main competitor, Bank Leumi, saw this number at 70.8% for the first half of 2012.

One explanation for Bank Hapoalim's relatively low operating expenses is the streamlining it undertook at its branch network in the last several years.

The bank relocated back-office operations to five operation centers that supply services to the branches. Hapoalim could thus save on staff- and real-estate costs.

In February, Bank Leumi announced that it was embarking on a similar plan and would cut about 800 jobs by 2014.

Although Leumi is just beginning the process, Hapoalim is close to wrapping up the first phase of its program, with the impending headquarters cuts following the moves at the branch network.