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October 28, 2020

Staff cuts: Measure to enhance efficiency or beheading?

The heads of public companies welcome staff cuts plans, while trade unions argue companies can become lucrative by renouncing loss-generating contracts, “Evenimentul Zilei” reports. According to the government’s letter of intent to the IMF, 7,000 positions in state-owned companies should be axed. The Craiova Energy Complex recently approved a decision to reduce staff numbers by 500, in 2011-2012, which would reduce the company’s expenditure by 22 pc. On the other hand, trade unionists argue that the jobs can be saved by renouncing loss-generating contracts. A case in point is Posta Romana. “The company switched from earnings of EUR 13-15 M, as reported in 2008, in the pre-crisis era, to approx. EUR 27 M-losses in 2010,” Matei Bratianu, the president of the Posta Romana Trade Union Federation, stated.

During the recession years, the company ran two “losing” contracts with the transport companies Group 4 Securicor and Blue Air. In Bratianu’s opinion, the white collar staff should not be reduced. “Working hours could be reduced, instead.”
On the other hand, Razvan Orasanu, the former head of The Authority for State Assets Recovery (AVAS), voiced his doubt that staff cuts would boost public companies’ efficiency. “It is simply a beheading. First and foremost, these companies don’t know exactly where they ‘stand’, what accounts for their losses”, he added. Furthermore, in his view, these companies need an inventory, as well as an inventory of the contracts which the companies have committed to in the past years with various firms. “Hidroelectrica, for instance, has committed to contracts running until 2018,” Orasanu stated.

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