Housing and Construction laying off 430 workers at subsidiaries

The cost cutting measures will affect workers at Solel Boneh, Israel’s largest construction company, and Herouth Engineering.

Avi Weinreb    5 Nov 03   11:17

Housing and Construction Holding Co. (Shikun u’Binui) (TASE:HUCN) today announced that it had decided to lay off 430 employees and implement other cost cutting measures at two of its subsidiaries, in response to a shortage of qualified workers in the industry.

The measures will be implemented at Solel Solel Boneh Building and Infrastructure (TASE:SOLB), Israel’s largest construction company, and at Herouth Engineering & Systems, a building maintenance contractor.

Housing and Construction said it expected to record a NIS 60 million charge for the cost-cutting measures in the third quarter, which would leave the company with an expected loss.

Most of the layoffs will be in management and operations, Housing and Construction said, adding that salaries of remaining workers will also be cut.

Solel Boneh said in a separate statement that it expected to record a NIS 40 million charge from the plan in the third quarter. Solel Boneh added that it was planning a strategic change in its business, by splitting operations into three business units - infrastructure and roads; construction for housing; and non-housing construction.

“Globes” reported last month that Solel Boneh’s management was formulating a recovery plan, following the company's NIS 56 million loss in the first half of 2003 and NIS 59 million loss in 2002. Solel Boneh had 1,500 employees before the layoffs, while Herouth had about 500.

Published by Globes [online] - on 5 November, 2003.