Teddy Sagi‘s online gaming giant Playtech PLC cut its business in Israel. The company inform the Azrieli Group Ltd., largest commercial developer, that it is reducing the space it will rent in Tel Aviv’s Sarona Tower, Globes citing people close to the matter.
Under the original plan, at the end of 2017, Playtech was to occupy four and a half floors of Azrieli’s new Sarona Tower. Now it seems that Playtech will take only two floors.
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Playtech is also seeking a release from its option for another floor. Much of the reduction in office space seems related to layoffs and personnel reductions at Playtech’s financial division, the Markets.com.
According to Globes, Playtech’s Markets Limited subsidiary (formerly TradeFX Ltd.) which operates Markets.com and a few other online trading brands has fired 80 of its approximately 180 employees in Israel, as the Markets.com business has shrunk and performed poorly.
Sources close to the company explained that the notification follows a decision to reconsideration of the company’s operating costs in Israel. The local business has lack of profit, compared with other countries in which the company operate with great success.
Back in February retail forex broker LeapRate announced a major restructuring at the Markets.com unit of Teddy Sagi’s Playtech, which included mass layoffs in a restructuring of sales, retention and customer service operations.
We believe, says leaprate that the layoffs and personnel movement at Markets.com are largely a concerted effort by Playtech management (now calling the shots at Markets.com) to automate Markets.com operations and emulate firms such as Plus500 Ltd – which Playtech tried unsuccessfully to buy last year for $700 million.
Sources close to the company have informed LeapRate that Playtech has also restructured the way in which Markets.com compensates its sales and retention staff – removing incentive compensation (i.e. commissions) and instead paying fixed salaries. Not surprisingly, under the new remuneration regime a large number of employees also left voluntarily, especially the higher-performing sales people who could no longer earn large commissions.
