Business in Brief: Cellcom Threatens to Lay Off 5% of Workforce

Central bankers unanimous on interest rate ■ Tel Aviv shares lower after four days of gains

FILE PHOTO: The logo of Israel's biggest mobile phone operator Cellcom is seen on the Cellcom building in Netanya, north of Tel Aviv, Israel January 28, 2014.
REUTERS/Baz Ratner/File Photo

Cellcom threatens to lay off 5% of workforce

Cellcom Israel, the country’s biggest cellular operator, warned on Monday it would immediately lay off about 5% of its workforce, or about 250 people, if workers don’t agree to concessions on pay. CEO Nir Sztern cited deteriorating conditions in the industry that led to a 37 million shekel ($10 million) loss for the company in the third quarter. “In light of the expected growth in competition in 2019 and the heavy weight of regulation, despite all of the efforts we have made and all the undertakings, we have to take additional efficiency measures,” he said in a letter to employees. Management agreed to a 10% pay cut as well. However, Cellcom didn’t report any layoff plans to the Tel Aviv Stock Exchange, which indicated they had still not been formulated but a negotiating point to be used for further discussion with the workers committee. Cellcom shares ended down 1.65% at 19.02 shekels. (Nati Tucker)

Central bankers unanimous on interest rate 

The Bank of Israel’s monetary committee voted unanimously to keep the benchmark interest rate at 0.25% on January 7, minutes of the discussions released on Monday show. The decision, the first to be made under its new governor, Amir Yaron, followed a decision by the panel in its previous meeting in November to raise the rate from 0.1%, the first increase in seven years. The bank said committee members believed “the process of raising the interest rate is expected to be gradual and cautious” to support the return of inflation to the midpoint of a 1%-3% target range.” Inflation has been hovering at the lower edge of the target in recent months. Committee members said that recent gyrations in global stock markets would have an impact on economic growth “only a small extent.” At the same time, some expressed worry that a market sell-off abroad may slow advanced economies and hurt demand for Israeli exports. (Reuters)

Tel Aviv shares lower after four days of gains

Tel Aviv shares ended lower for the first time in five sessions as the Martin Luther King Day holiday in the U.S. kept foreign investors away and reduced volume to just 639 million shekels ($173 million). “It was turnover like a neighborhood grocery store,” said one market source.  The TA-35 and TA-125 indices both ended down about 0.6% at 1,517.58 and 1,373.92 points, respectively. B Communications plunged 11.4% to 17.46 shekels.  Its Bezeq subsidiary fell 4.3% to 3.26. Bank shares were lower, with Leumi off 1.6% to 23.06 and Hapoalim down 1.2% to 23.55 Ham-Let surged 7.2% higher to 68.65 after its S&S Valve unit won an $11.1 million contract from Samsung for flow indicators. Super-Sol ended down 0.3% to 25.67 even though Leumi Capital Markets raised the food retailer’s target price by a shekel to 29. (Assa Sasson)