EMCC European Monitoring Centre on Change

Tarom

Company/Organisation:
Tarom

Geographic Location

Country: Romania
Region: Bucuresti; Bucuresti
Location of affected unit(s): Bucuresti

Company

Sector: Transportation / storage
Transportation and storage
51 - Air transport
Number Employed: 1800

Employment Effects

Announcement Date: 10-08-2020
Planned Job Reductions min: 700
Planned Job Reductions max: 700
Type of Restructuring: Internal restructuring
Employment Effect Start: 10-08-2020
Foreseen End Date: 30-09-2020
Direct Dismissals: 700

Additional Information

The Romanian public air transport company Tarom announced the intention to dismiss 700 employees by end of September 2020. The company is cutting 700 jobs from the commercial, procurement and economic departments as well as some managerial positions. The measure is part of a restructuring programme promoted by the new management of the company in order to diminish financial losses, which increased during the last 10 years and aggravated during the COVID-19 pandemic crisis.

Tarom received restructuring aid of €38.67 million last year and applied for €65 million as COVID-19 aid. In order to receive state aid, it will have to comply with the reorganisation plan it has already sent to Brussels, and the European Commission must agree to the document. In addition, the company hopes for a non-refundable aid from the Romanian state of more than €100 million.

The company offers employees the opportunity to accept severance pay if they leave voluntarily. Those who resign will receive up to seven months of severance salary, an average of €10,000.

Employees up to 10 years of service working at Tarom will receive four gross monthly salaries. Those up to 20 years of service will receive five gross monthly salaries and those over 20 years of service, seven gross monthly salaries. The offer expires on 28 September 2020.

So far, only the unions representing the flight attendants have responded. They say there is too little money offered in relation to the collective labor contract and are demanding negotiations.

Currently, Tarom has a workforce of 1,607 employees. Last year, Tarom announced the dismissal of 300 persons.

Update, 28 June 2021

Tarom estimates losses of RON 230.13 million for 2021 (approx. €47 million), down from RON 431.3 million (approx. €87 million) in 2020.

According to the Ministry of Transport and Infrastructure order regarding the approval of Tarom's revenue and expenditure budget for 2021, the company will continue implementing the technical unemployment programme by suspending individual employment contracts for about 300 employees each month until the start of staff restructuring in July 2021. The company will also cut employees' salaries by 20%.

By the end of the year, the company plans to reach 1,141 employees, that is 410 employees less compared to December 2020.