Strauss Elite yesterday announced the downsizing of its headquarters from 32 to 11 people.
Chairman Ofra Strauss-Lahat said that the company's reorganization involves reducing both executive and lower-echelon staff, as well as cost-cutting.
According to chief executive Erez Vigodman, the global financial crisis may become an opportunity for the group to meet its self-set goals for the end of 2004 as Israel's leading food retailer.
But so far, the group's results have underperformed arch-rival Osem Investments in almost every parameter.
The gap between the companies began forming in the first half of this year. Osem netted NIS 50 million while Elite's net plunged to NIS 27 million, with a tiny NIS 1 million profit in the second quarter.
In the first quarter, both posted operating profits of NIS 33 million. Yet in the second quarter Osem posted an 18% jump to NIS 40 million, while Elite settled for an operating profit of a mere NIS 3 million.
The main problem for Elite was a 9.7% drop in sales compared with the same quarter last year, while the company had expected sales to grow. To implement its plans, it had recruited personnel, which increased general and management expenses by 33%, and sales and marketing expenses by 18%.
Elite has been investing heavily in trying to up sales outside Israel, so far with no success.