CFR Marfă to lay off half of its staff - 9,000 people

CFR Marfă, which is preparing for its privatization next year, must balance its revenue and expense budget, considering that such a budget does not exist for 2009, as the recently appointed General Manager of CFR Marfă, Mihai Frăsinoi, told Business Standard.

“We will have to restructure our staff. At present, there are 17,400 employees, and we must cut about 50 percent, to have some 8,500 employees in 2010, in order to be able to develop a balanced budget. We no longer have time for this in 2009,”Frăsinoi said.

The official added that the company must honor its ongoing commercial contracts and apply the personnel restructuring program. Frăsinoi said that foregoing 50 percent of the CFR Marfă staff, from all fields of activity, will raise the company’s efficiency, which will continue to operate “without problems.” Trade union leader Voicu Sala, Vice President of the Federation of Locomotive Mechanics, declared “off the record,” that talks at CFR Marfă involve over 8,000 employees that are to be laid off. Provided the national collective employment contract is complied with, an employee could receive at least RON 6,000 (some €1,418) in severance pay, based on an average net wage of RON 1,000 (about €236).

Sala told Business Standard that CFR Marfă representatives will meet Transport Minister Radu Berceanu at the end of this week, to discuss the staff downsizing program. Moreover, the talks referring to layoffs at the other two CFR companies, CFR Călători and CFR Infra, will be finalized this week. “At Călători, the is talk about laying off 2,300-2,500 employees, and at Infra, some 2,000 people,” Sala added. According to him, trade unions will demand not only severance packages, but also professional reconversion programs for those under the age of 45. The layoffs to take place at CFR Marfă will cut the company’s costs, considering that it has been accumulating debts and registering losses since 2008, due to the economic crisis, Frăsinoi said. To eliminate these debts, the official said that human resource-related expenses must be the first to be reduced, which will obviously lead to a cut in wage funds.

“We now have over RON 400 million [some €94.54 mln] worth of debts to CFR Infra, which in turn owes Electrica [electricity company]. There are also debts to the state budget and suppliers,” Frăsinoi added. The restructuring program is even more important, as the company may register profit next year, after posting losses lately.

“I believe that we will grow, and we will make a little bit of profit next year. We could start paying our debts this year, continuing through next year, when we could become a profitable company,” Frăsinoi indicated.