Redundancies and increased labour efficiency

While some 129,000 people were working with the largest 10 Romanian private employers in late 2007, the main state-owned companies were employing 100,000.
As of end-2006, the ten largest private employers in terms of staff were employing 134,000, which means that in one year’s time they laid off 5,000 people, cutting their staff by 4%. Most of the large private employers lost employees in restructuring processes.
“Cutting the number of employees is a signal that labour efficiency of the dismissing employers is on the rise and the Romanian economy is headed in the right direction,” says head of the Economic Projection Institute (IPE) of the Romanian Academy Lucian Albu.
Most of the ten largest private employers in Romania reported rises in their business turnovers in 2007 year on year. For instance, the iron and steel works ArcelorMittal of Galati saw its turnover advance 21% in 2007, and the local Dacia automobile manufacturer witnessed a surge of 32% in its. The turnover of the largest Romanian company, the Petrom oil corporation, declined 1%.
The largest private employer in Romania in late 2007 was Petrom, with close to 30,000 employees, which was nonetheless 3,200 less than one year before. In 2007, Petrom took over Petromservice company, with 9,800 employees. Petrom’s employee base reached 34,120 in mid-2008.

ArcelorMittal laid off some 1,500 employees in 2007, Banca Comerciala Romana (BDR) 1,000 and Eon Gaz gas utility 700.
Some companies will continue to shed labour this year as well. Romtelecom, the main landline phone operator in Romania, is currently undergoing its toughest restructuring process of the past years that will lead to a cut of 2,500 employees throughout the year. As of end-2006, the company was employing more than 12,800 employees, being the fourth largest private operator. BCR, the largest bank in Romania’s banking system, is said to continue to boost its operational efficiency, which entails staff redundancies.
State-owned Romanian Post Service is Petrom’s sole competitor in terms of employees, with a 35,122-strong staff in 2007. Among other large public employers are the Romsilva National Forestry Administration, Electrica electricity supplier, CFR Calatori passenger rail company and the National Pitcoal Corporation (CNH). There are only 17 private companies employing more than 3,000 people. “If we take into account that unemployment in Romania is very low, we will see that people out for a job will surely find one,” says Albu. Unemployment nationwide was 3.8% at end-June 2008, the same as one month before, data with the National Employment Agency indicate.
As many as 32% of the local companies are intending to hire staff in the next 3 months of the year, according to a recent job trend survey conducted by Manpower, the world’s largest manpower leasing company. At the same time, 11% of the companies are contemplating redundancies in the last quarter of the year.The public administration is expected to perform most of the staff hiring in the last quarter of the year, and the net hiring projection, the difference between the percentage of employers anticipating a rise in total hiring and the percentage of those anticipating a fall, is 29%.
The net hiring projection nationwide for the fourth quarter of 2008 is 21%, down 5% from the third quarter. Romanian employers are the most optimistic in EMEA – Europe, Middle East and Asia region, and they are followed by the Dutch, with an 11-percent net hiring projection. The smallest hiring projection in Romania, of just 4% in the following months, is in the electricity, water and gas sector.
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