At the moment, five of its factories are almost completely closed down.Continue reading
Renowned Hungarian lighting company Tungsram will lay off 1,600 people – more than half of its total workforce- by year’s end as a result of its decision to cease production of conventional lighting.
Tungsram CEO Joerg Bauer has announced a collective redundancy on Wednesday. By the end of the year, 1,600 workers will leave the 125-year-old Hungarian company, which employs a total of 3,000 people, so the layoffs will affect more than half of the workforce.
Bauer first informed the trade unions and the works council, and then gave a video briefing to Tungsram workers on the course of the layoffs. He explained the decision by saying that the traditional light bulb manufacturing business would be completely discontinued because of massive losses due to the soaring energy and raw material prices.
“This is the only way for the 125-year-old Hungarian export company to remain competitive on the world market. The planned measures will save the jobs of 1,500 people,” Tungsram said in a statement.
At the same time, the company’s factories will not be closed down. Instead, as part of a technological changeover, Tungsram will shift its focus to energy-saving lighting upgrades, parts, and components production, and LED lighting for outdoor and industrial use and in tunnels.
The layoffs will affect mainly production line workers at all five of the company’s plants located in Budapest, Kisvárda, Hajdúböszörmény, Zalaegerszeg, and Nagykanizsa.
The layoffs will take place by the end of the year; until then, employees will continue to receive their wages and severance pay in accordance with the Hungarian Labor Code.
The layoffs at Tungsram will first begin in Kisvárda and Hajdúböszörmény, Gábor Sallai, president of the Independent Trade Union of Tungsram Workers, told Telex on Thursday.
According to information from the union, the redundancy of 1,600 employees will affect:
Tungsram has long been known to be facing serious financial problems. On April 11, the company ordered partial shutdowns at all five of its factories, which has since ended, but the glass factory in Nagykanizsa has been permanently closed since then.
The company also asked the government for help, but there has been no recent news about this.
Established in 1896, Tunsgram soon became a global Hungarian brand that is to this day synonymous with lighting products in many parts of the world. In 1989, American multinational company General Electric Lighting fully acquired Tungsram. However, in 2018, GEʼs lighting business in Europe, the Middle East, Africa and Turkey, as well as its global automotive lighting business was acquired by its chief executive in Hungary, Joerg Bauer. He gave the business back its old name, Tungsram.
Socialist MEP István Ujhelyi said that the Hungarian state should help people who lose their livelihoods with all the means at its disposal, especially in the current period of crisis.
He added that EU funds are also available for this purpose, such as the European Globalization Adjustment Fund (EGF), which helps people who have lost their jobs as a result of economic changes caused by globalization. This multiannual envelope of more than €200 million can be activated in particular when at least 200 people are made redundant from a company.
“This EU money could be used to help those affected to find new jobs, start their own businesses, or take part in training or retraining,” the politician explained. This is why it is completely incomprehensible to him that “according to the information available, the Fidesz government has not applied for any funding from this joint European program to support Hungarian workers who have lost their jobs since 2010.”
At Thursday’s regular press briefing, news site Telex asked the Prime Minister’s chief of staff whether the government would provide any help to Tungsram. Gergely Gulyás said they wanted to help the workers and hoped they could find jobs in investments in the area. Gulyás’ response likely implies that the government is not planning to provide direct help to the workers who have lost their jobs.
In the featured photo: Tungsram CEO Joerg Bauer. Photo by György Varga/MTI