TAROM has started the personnel restructuring procedures as part of the company's recovery plan
TAROM announces that it has initiated the staff restructuring project, one of the essential components of the company's recovery plan. This measure is part of an extensive program of procedures based on which the European Commission approved the Romanian State granting a rescue loan for TAROM at the beginning of last year. Subsequently, the company notified the European Commission, on August 24, 2020, the restructuring plan in order to obtain state aid for restructuring for the next 5 years.
In the context of the COVID-19 pandemic, as a result of the imposition of travel restrictions, both nationally and at European and global level, the passenger air transport sector registered a significant decrease in 2020 (over 60% compared to previous years), generating significant losses for operators in this sector.
TAROM has started the staff restructuring procedures
Thus, in an extremely difficult market context, the recovery of the company in the short term has become critical, being necessary that the cost reduction measures already implemented during the lockdown period (technical unemployment for low-skilled staff, the abolition of more many internal and external agencies, the implementation of a voluntary departure program, the reduction of operating costs, the preservation of aircraft on the ground) should be doubled by measures with medium and long-term impact.
By restructuring the staff, TAROM aims at the optimal sizing of the organization in relation to the current and estimated volume of activity for the coming years, aiming at reducing staff costs, but also an efficient distribution of activities at the company level.
The implementation of this measure provides for several legal steps on the evaluation and separation of staff subject to restructuring based on competitions with transparent, fair criteria, communicated to all involved, and the conclusion of employment with employees subject to dismissal following the separation process. The estimated duration of the measure is 6 months, leading to an average annual reduction in the company's staff costs estimated at around EUR 8 million.
Other medium-term measures in the Company's restructuring plan are aimed at optimizing the aircraft fleet, commercial optimization and cost optimization.