Factories in the South are poised to lay off 2,500 workers in the first quarter of this year as the deepening economic crisis continues to take its toll on business activity in outlying areas. "Out of the factories in the South, 58 percent are planning to lay off employees during the first quarter of this year," said Arnon Kashensky, head of the Israel Manufacturers Association in the South. "The factories, which employ 39,500 workers, intend to lay off 2,500 workers, or 6.3 percent, of the workforce." The survey was conducted by the association among 200 factories in the Negev. It revealed that 15% of the factories plan to cut 10% of their workforce in the first quarter of this year, another 15% intend to cut 15% of their workers and 70% reported that they would lay off 5% of their staff. Faced with a deteriorating economic climate, 60% of the factories said they had reduced working hours on production lines by an average of 16%. At 80% of the factories, sales to the local market fell by 25% in the first quarter of this year, while exports dropped by 26%. Seventy percent of the industrial factories surveyed reported that due to the difficult situation of industry in the South, management has cut executive salaries by an average of 11%.