Belt tightening at Playtech?

The Israeli publication Globes has reported that online gambling provider Playtech is scaling back its requirement for office space in Israel, claiming that the company has informed major commercial building developer Azrieli Group Ltd., that it is reducing the space it wished to rent in Tel Aviv’s Sarona Tower.

Globes quotes unidentified sources who said that the original plan was for Playtech to rent four and a half floors of the new Sarona Tower, but that the company has now cut that by more than half, advising that it requires only two floors.

It is alleged that the company is also seeking a release from its option for another floor. Much of the reduction in office space appears to be related to layoffs and personnel reductions at Playtech’s financial division, Markets.com, the reports speculate.

Markets.com (formerly TradeFX Ltd.) has reportedly fired 80 of its approximately 180 employees in Israel, as the business has shrunk and performed poorly.

Back in February retail forex broker LeapRate reported a major restructuring at the Markets.com unit, which included mass layoffs in a restructuring of sales, retention and customer service operations.

The broker speculated that the cutbacks are part of a concerted effort by Playtech management to automate Markets.com operations and emulate firms such as Plus500 Ltd – which Playtech tried unsuccessfully to buy last year for $700 million (see previous reports).

“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,” according to the media report.

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