Restructuring events
European Restructuring Monitor (ERM)
The restructuring events database contains factsheets with data on large-scale restructuring events reported in the principal national media and company websites in each EU Member State. This database was created in 2002.
The Bulgarian-based weapon manufacturer Arsenal announced a collective dismissal programme which will affect 2,000 of the 9,000 workers in the production plant in Kazanlak, in the Stara Zagora region. The restructuring will affect mostly working pensioners and low-skilled workers, both with permanent and temporary contracts. On 24 March 2020, the company filed an official notification to the employment agency and the labour office in Kazanlak about the dismissals that will become effective on 29 April 2020. The workers come not only from Kazanlak but also from the nearby towns - Maglizh, Stara Zagora and Pavel Banya.
The reorganisation is due to the outbreak of COVID-19 and to the unpredictable situation in the international markets in the last months. The company is exceptionally challenged: it is fully export-oriented, and it has been experiencing an orders decrease mainly due to the drop of barrel oil prices affecting the traditional Arsenal customers, who had to shrink their budgets for defence spending.
The dismissals were discussed and agreed with representatives of Confederation of Independent Trade Unions in Bulgaria (CITUB) and Labour Union Podkrepa before the Bulgarian government introduced the state of emergency due to the pandemic. Following the negotiations, the company reduced by 1,000 the initial number of dimissals (3,000). The CEO assured that those dismissed will be provided with the most favourable benefits foreseen in the law and in the collective bargaining agreement.
Arsenal is a firearms and military equipment manufacturer and is Bulgaria's oldest arms supplier with a history dating back to 1878.
Update 30/04/2020: Currently, the dismissals in Arsenal are on hold. According to the company's CEO, the market situation is very dynamic and the company depends very much on the orders by its foreign customers. After the official notice to the local employment agency, the company has reviewed the need for optimisation of the staff. The CEO also explained that currently, no direct dismissals are taking place, only normal worker turnover, such as quitting based on mutual agreement, retirement, death and end of probation period. He also mentioned that currently, the company can secure work for all - more than 8,000 - of their employees. Based on the present discussions, the Confederation of Independent Trade Unions in Bulgaria, expressed a conclusion that if there are any dismissals, they might be no more than 350.
Eurofound (2020), Arsenal, Internal restructuring in Bulgaria, factsheet number 100138, European Restructuring Monitor. Dublin, https://dev.eurofound.europa.eu/restructuring-events/detail/100138.
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