While Prime Minister Calin Popescu Tariceanu indicated that the authorities are preparing a set of measures to ensure that Romanians will enjoy an average salary of €500, which equals the average wage in the Czech Republic and Slovakia, consultants warn that the moment is approaching when companies will resort to lay-offs to offset salary hikes.
In April, the most significant salary hikes, which include Easter bonuses, were reported in the road and water transportation sectors (over 40 percent), and in the mining, hydrocarbon extraction, crude oil processing, and nuclear fuel treatment industries, of between 19 and 38 percent.
However, higher salaries bring about an increase in fixed costs, which could lead to a wave of lay-offs.
“The rapid increases in wages in the past few years have become a burden for an increasing number of companies on the local market in terms of fixed costs. Salary costs are weighing increasingly more, and it will not be long before some companies will be forced to downsize employees in order to cut costs,” said Csaba Gerely, Senior Consultant with PricewaterhouseCoopers Romania.
