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Screenshot of a breaking news alert e-mail from Q2 2017
LeapRate Exclusive… LeapRate has learned from sources in Israel that online gaming and casino company 888 Holdings Public Limited Company
(LON:888) is in process of laying off several dozen employees in the country.
888’s moves come shortly after we exclusively reported that UK based William Hill plc (LON:WMH) will be shutting its operation in Israel, and laying off most of its 250 Tel Aviv based employees.
The motivations behind both moves seem similar – cost cutting.
Israel is a major center in the online gaming world as well as in areas such as online marketing and software development which are essential to the industry. However the strong Shekel, combined with rising real estate prices and low unemployment levels, has made Israel a much more expensive place in which to do business. Israeli technology companies have also been actively outsourcing to lower cost locations such as India and Eastern Europe.
888.com currently has a total of approximately 1,300 employees, most located in the company’s Herzliya, Israel offices.
Israeli Hebrew business news site Calcalist is reporting that according to 888, the layoffs are part of a streamlining process, including, among other things, a reduction in the number of personnel in a number of sites around the world.
The company also claims that the decision to lay off staff stemmed from the need to deal with the hike in gambling taxes in several markets in which the company operates, as well as tightening regulatory requirements.
The layoffs, and other efficiency measures, are intended to be completed by the end of July.
888 was founded 20 years ago by brother tandems Avi and Aharon Shaked and Shai and Ron Ben-Yitzhak, and today is one of the largest online gaming companies in the world. Last June, Aharon Shaked’s heirs (he passed away in 2010) sold roughly half of their holdings in 888 for £108 million ($140 million), leaving that side of the family with a 12.9% stake in 888. Avi Shaked holds an additional 24.1% percent of the company.
The news of both 888.com and William Hill’s downsizings come at an interesting time, i.e. right at the same time as Israel’s largest online gaming maven, Teddy Sagi, is cashing out of the business. Sagi just last week sold £337 million ($429 million) of shares in his flagship online gaming technology company Playtech PLC (LON:PTEC). That represented the third major sale of Playtech shares by Sagi over the past eight months, taking his stake in the company down from 34% late last year to just 6.3% today. William Hill uses Playtech software, while 888.com uses rival NetEnt.