The Isracard Group announced today the retirement plan of approximately 100 employees in a collective agreement that will retire as part of a voluntary retirement plan, in addition to the termination of the employment of approximately 100 employees employed in outsourcing or personal contracts.
The employees in the collective agreement that will be included in the framework of the proposed retirement plan will receive increased compensation at a rate of up to 200% beyond the amount of compensation provided by law. These employees will retire by the end of 2021. This plan has been formulated together with the company’s employee representatives.
The cost of the retirement plan is estimated by the company at approximately NIS 45-35 million, and it will be handled in accordance with generally accepted accounting principles.
The company estimates that the expected annual savings from these moves, after their completion, is approximately NIS 40-50 million per year.
In the meantime, the company announced the cessation of a technological project (implementation of an external platform) and a move towards self-development of the essential basic components of the project, as part of preparing to implement the group’s strategy alongside dynamic changes in the competitive environment and macroeconomic environment.
In the company’s view, the cessation of the project is expected to help the company streamline its resource allocation and diversion to support current business and operational needs, and the transition costs for self-development of the project’s essential components are expected to be significantly lower than the project continues.
In light of the termination of the project, the company estimates that in its financial statements for the year to end
On December 31, 2020, a one-time expense in the range of NIS 67-71 million (before tax) will be recorded.
Dr. Ron Wexler, Isracard Group CEO: “The streamlining measures and the voluntary retirement plan that we announced today are part of a broad strategic plan to change the face of the Isracard Group. As part of these changes, we are entering more into the areas of digital payments, sales of insurance products and advanced financial services. It is clear to us that the handling of the company’s expenses is necessary and required, and we will continue to act on the issue.
“Isracard’s management works in cooperation with the employees’ representatives in order to lead these changes by agreement, for the benefit of all Isracard’s stakeholders – shareholders, employees, suppliers and customers.”