Logic Industries Lays Off Israeli Employees for Major Arab Client

Information technology security firm letting go 250 of 600 employees as it tries to maintain contracts with companies based in countries with which Israel has no diplomatic relations, sources say.

Entrepreneur and investor Mati Kochavi
Entrepreneur and investor Mati Kochavi. Sivan Faraj

Logic Industries, which makes information technology security software for companies in the natural resources industry, is letting go 250 of the 600 people it employees in Israel, apparently at the behest of a major client from the Gulf, TheMarker has learned.

The company, which is controlled by Mati Kochavi, the entrepreneur and investor also behind security company AGT International, is mainly firing people involved in installing systems. Logic will remain in Israel but limit its local operations to research and development, sources said.

The contract with the key customer will be moved from Logic to AGT, which is based in Zurich and will hire staff to replace the Israelis being laid off. The problem for Logic, sources said, is maintaining contracts with companies based in countries with which Israel has no diplomatic relations.

Employees of the company, based in Kibbutz Yakum, will be sent notices in the next several days to attend a pre-dismissal hearing, as required by law, by the end of the month. The layoffs will entail severance costs of about 35 million shekels ($9 million), or about 100,000 shekels per employee. As many as 100 staff have left in the past 10 months.

Logic confirmed some parts of the report, saying that a key project was reaching its conclusion during the course of the year and that the company was adjusting its staffing accordingly to include “developing a transition plan for Logic to a business model and developing a severance plan for employees.”

Kochavi’s group specializes in homeland security, in particular “smart city” functions that collect data and pictures through networks of cameras and sensors. Last May, AGT won a contract with Cisco to develop a system for the city of Hamburg.