Text size

The latest knock-knock joke making the rounds within the Bank Hapoalim management is "What is Bank Leumi's strategy? Leu-Me Too!" The joke was born when Bank Hapoalim's biggest competitor announced plans to bid for Discount Bank New York 24 hours after Hapoalim announced its intentions.

Yesterday Leumi announced a voluntary retirement program slated to reduce its payroll by 500. In this case, Leumi didn't try to imitate the Hapoalim austerity plan that included 900 dismissals. Leumi's plan is based on voluntary participation and the target number is substantially lower. Leumi plans to implement the arrangement over the course of 2003, while Hapoalim opted to yank the bandage off quickly, a process that is almost complete. The Hapoalim pink slips went to workers from a variety of categories. At Leumi, the retirement plan is open only to workers with 28 years of seniority or women over 60. Hapoalim, we note, was more efficient than Leumi even before the streamlining plan.

"In contrast to others, Bank Leumi will announce a voluntary retirement program in the coming days, a process that serves the interests of the bank and offers an opportunity to workers to open a new phase in their lives. We believe that workers who have dedicated their best years to serving the bank, deserve the chance to dedicate some quality time to themselves," states a circular sent yesterday to all the bank's branches. The wording is delicate, even picturesque, but the coming months will not be easy for workers whose backs the bank would like to see.

The agreement with the union states that no one can be forced to retire, but the pressure and cajoling from superiors will leave few with any choice. It's unlikely we will hear the voice of the Histadrut labor federation, and Bank Leumi union chair Louie Roth probably won't rattle his chains - after all, this is voluntary.

In the end, is the Hapoalim move crueler than Leumi's? Not necessarily. For laid off Hapoalim employees, the shock was enormous and abrupt; Leumi retirees face several months of uncertainty and pressure. In both cases, those involved will find themselves outside the work force with little chance of getting back in.

The big difference between the two banks is in the management dictated by their differing ownership structures and labor relations. Bank Hapoalim has private shareholders who give CEO Eli Yones complete backing for carrying out austerity measures, as well as a responsible union concerned with the organization's long-term stability.

At Leumi, Galia Maor is the can-do CEO in all areas except labor relations - the exclusive purview of Roth and his buddies. Even with Leumi's controlling shareholder - the state - Maor has a problem. The government is evading its obligation to streamline the wasteful and inflated public service, so its performance expectations from the banks it owns are low. The result is that Galia Maor looks at the competitors doing the necessary and the owners doing nothing, and chooses to do something in the middle.