Hungarian lighting systems producer Tungsram will completely stop producing traditional lightbulbs. As a result, 1600 employees – more than half of the total workforce of 3000 – will be laid off by the end of the year. The layoff affects all five production units of the firm. The management has notified the union and the works council about the layoff.
The stated reason for the downsizing is the uncontrollable rise in the cost of energy and materials that caused the firm to operate at a massive loss. The management states there is no room for restructuring at the present level of personnel, and the firm cannot compete with Chinese producers.
In February 2022, the management decided to unilaterally terminate several points of the collective agreement that stipulated the conditions of layoffs. These conditions were more favourable for workers than prescribed in the Labour Code. At that time, the workers responded by setting up a strike committee. They said they had been quite flexible during the collective agreement negotiations regarding other themes (for example, wages, non-wage benefits) precisely to negotiate favourable terms regarding mass layoffs.
Tungsram was sold to General Electric in 1989 and sold again by General Electric to Hungarian investors in 2018. In 2019 it became a strategic partner of the Hungarian government. In 2020 the first wave of the pandemic caused an 80% loss in the firm's stock of orders. In 2022 the Russian-Ukrainian war resulted in the loss of Russia-related business projects.
The Hungarian Investment Promotion Agency (HIPA) said it would do its best to find new investors to replace Tungsram at the affected locations.