Furniture producers consider shedding 20% of jobs

Around 20,000 employees in the furniture industry are likely to be laid off in coming months following the crisis caused by the depreciation of the European single currency against the ROL, say the representatives of firms affiliated to the Association of Furniture Producers of Romania (APMR).
“The recent poll by APMR shows that a number of 23 companies, with total employees of 17,000 people, have so far fired 1,200 employees. The pace of layoffs will double in coming months, eventually affecting a total of 20,000 people,” APMR officials said.
At the moment, the number of people working in the Romanian furniture industry is in excess of 100,000. Being mainly focused on exports, furniture producers were thrown off-balance financially after the euro dropped by nearly 10% against the ROL as of last September.
“In recent months we have laid off around 15% of our employees, and this percentage will exceed 20%. Because of the strong appreciation of the domestic currency in recent months, we have lost export contracts with France and Germany, since customers do not agree with price rises,” says Dumitru Petcu, general manager of furniture manufacturer Alprom Pitesti, which exports 90% of its production.
The company has 1,500 employees and annual sales in the region of 15 million euros.
“All companies that export more than 80% of their production will have to start laying off,” he added.
Other measures that can be adopted by the management of furniture companies include salary freezing, stopping meal tickets and the unilateral cancellation of export contracts.
“We also plan to resort to layoffs, around 10% of total staff, that”s over 70 employees,” said Andrei Menhardt, general manager of the Bucharest-based producer Silvarom, a company with a turnover of 18 million euros.
Apart from layoffs, Romanian furniture companies could also close down or freeze activities for periods of two or three months by sending employees on unpaid leave.
“Freezing salaries at current levels is pushing the skilled labour force to migrate to European Union countries,” APMR representatives added.
According to producers, the furniture industry accounts for 7.5% of total exports, with imports worth 6% in the foreign trade balance, creating a surplus of over 500 million euros.
georgiana.stavarache@zf.ro