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.
Loksa Laevatehas, the Estonian company which builds and repairs ships has announced the dismissal of 530 employees in three waves (at the end of February, March and April). The workforce reduction will affect most of the employees in the company - only 2 members of management and some employees currently on parental leave will remain.
The main reason for such large scale redundancies is a sharp decline in orders. According to the company, the amount of work will reduce considerably in the second quarter of the year even though the management is trying to conclude new contracts. The management decided to stop work at the plant until new orders come.
The aim is to reorganise the company, modernise equipment and continue working with new orders. All 530employees were given dismissal notice. However, in case the management will succeed in concluding new contracts, some of the dismissals will be cancelled. The company changed owners at the end of 2009 when local companies took the Loksa Laevatehas over from Odense Steel Shipyard. Since then the company has been producing mainly ship constructions for large container ships. However, customers have recently began favouring other supplies in China and Hong Kong.
Such scale of redundancies will put the small city of Loksa into a difficult position as 360 of the 530 persons who received redundancy notice are residents. According to the city council chairperson, the city will lose about 20% of its financial incomes with this restructuring and will face difficulties in giving support to all persons made redundant.
Eurofound (2010), Loksa Laevatehas, Internal restructuring in Estonia, factsheet number 70137, European Restructuring Monitor. Dublin, https://dev.eurofound.europa.eu/restructuring-events/detail/70137.
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