Gorenje forced to reduce its workforce due to impact of COVID-19

“Following the announcement of the global COVID-19 pandemic and the epidemic in Slovenia in mid-March, we have already seen a decline in household appliances orders in March 2020. The trend continues in April. As a result of state measures to ban the sale of goods and services to consumers, the sales of household appliances have fallen dramatically both locally and in most European countries, where restrictive measures have been implemented,” the company states in an update. In the first quarter of 2020, the company recorded a significant loss, a large majority in March. For the second quarter of 2020, in April and May 2020, Gorenje says it expect an additional loss and due to the effects of the pandemic and completely changed circumstances on the markets, the company expects significantly worse performance than the original estimates for the period, which was predicted bring in a profit of EUR 1.1 million. The group is therefore forced to implement various crisis measures, among them a reduction of the number of employees. In doing this, all Hisense Europe Group companies will strive to minimize redundancies by using soft methods of staff reductions, including the disinvestment of non-core companies, outsourcing, consensual leave and retirement. “We will also focus on sales increase, speeding up the e-commerce business and other operational adjustments to ensure the survival of the company in the expected global recession, following the coronavirus pandemic,” the company continues. By the end of March, orders at all Hisense Gorenje factories in Velenje, Serbia and the Czech Republic had decreased by a third, and orders for April 2020 were down almost two-thirds. In May and June, the orders dropped about 25% (compared to the same period last year). In Gorenje, d. o. o., this also means decreased need for workers in the production and related organisational units. All of this means that Gorenje is forced to the process of terminating employment contracts for about 700 workers in Gorenje, d. o. o., especially in manufacturing, as a result of the decline in orders. The headcount reduction will also occur across Hisens sales offices in Europe, as the decease of the number of employees will need to happen in the entire Hisense Europe Group, the update continues.