RIGA - Latvijas Dzelzcels railway company already in the second half of last year started to revise its functions and processes, and gradually firing employees, said the company's spokeswoman Ella Petermane.
She said that there are a number of reasons for reducing the number of employees. One of them is a drop in transportation of cargos in 2019, and the forecasts show that this will not rise in the nearest time. In 2019, transportation of cargos dropped by 16 percent compared to 2018.
Petermane said that in line with the global economic and political processes, last year prices of fossil supplies - coal, oil and oil products - dropped in international markets, the number of transactions reduced and less cargos of these products were transported.
She said that the climatic conditions should also be taken into account - there are no cold winters in Europe, therefore there is no demand for coal, which has been one of the main fuels.
Latvijas Dzelzcels since last fall has been revising technological processes in order to improve efficiency, stabilize the company and ensure its core function - maintenance of the railway infrastructure. Thus, reduction of costs is one of the decision, resulting in a plan to terminate labor contract with about 1,500 employees by the end of this year.
Petermane said that the company started gradually firing people already at the end of last year.
The first stage of downsizing has affected the administration. In the future, decisions will be made about functions and processes and increasing their efficiency by cutting costs.
Information about further stages will be provided to the State Employment Agency and mass media.
Latvijas Dzelzcels on January 1, 2020, employed 6,265 people, while the number of employees in the concern reached 9.950.
Transport Minister Talis Linkaits (New Conservative Party) has resolved to put up a taskforce at the ministry that will have to deal with social issues in relation to restructurization in Latvijas Dzelzcels and reduction of the number of employees. The taskforce will have to look into transparency of the process and consider the ways to provide the necessary support and reduce social pressure.
Latvijas Dzelzcels is a fully state-owned enterprise managing public railway infrastructure. It is the leading company of the LDz Group, which includes six subsidiaries.