Electrolux will downsize the production of vacuum cleaners and refrigerators in Jászberény, Hungary. The decision will impact about 800 employees. At the same time, the company has announced it will invest EUR 100 million for automation and digitalization in its Nyíregyháza plant, also in Hungary. In reaction to the announcement, the Finance Ministry has said that it keeps a close eye on the fate of the employees.
Electrolux announced in January that it would significantly reorganize its production to improve efficiency. As a result of the overview, the company has decided the closure of the Jászberény plant.
Electrolux Group aims to boost competitiveness by outsourcing current vacuum cleaner production in Jászberény to external partners during 2020, the company announced. Outsourcing the production of vacuum cleaners, chest freezers, and combi-top refrigeration products currently produced in the plant, will impact approximately 800 Electrolux employees.
In the announcement, Managing Director Electrolux Lehel Hungary Sándor Gönczy, said they recognized the restructuring of their operations in Jászberény would be challenging for many of their people.
“We are proud of their expertise and achievements, and our main concern now is to support our impacted colleagues.”
“We are going to approach the local works council, and we trust that we’ll be able to reach socially mindful and fair solutions for our employees,” added Gönczy.
There has been no mass layoff of similar amplitude yet this year in Hungary, and in fact, according to the National Public Employment Services data for July, the number of people affected by collective layoffs did not exceed 800 in any given month, mfor.hu reports. The unemployment rate could increase by up to 10% in the county due to the decision.
After the company announced the downsizing, the Finance Ministry has said that it is closely monitoring the fate of employees of the Electrolux plant in Jászbereny as well as examining the immediate relocation of workers affected by the layoff.
The Electrolux Group also announced on Tuesday a planned investment of approximately EUR 100 million in its Nyíregyháza refrigeration production plant between 2020 and 2023. This is the largest Electrolux manufacturing investment in Hungary since the company started its operations in Hungary in 1991.
The Electrolux Group’s refrigeration manufacturing operations will focus on high-end categories, such as built-in and combi-bottom appliances that are in increasing demand by consumers across Europe.