Gabrielius Landsbergis' huge success - sanctions work: Lithuanian Railways Group will lay off 2,000 employees

 "After assessing the impact of the sanctions imposed on Belarus and Russia on the Lithuanian Railways (LTG) group, the company will say goodbye to about 2,000 employees. Their severance pay will be EUR 6 million. However, according to the trade union, several hundred fewer employees may be laid off.   

 

    According to the company, the LTG Group is currently implementing a plan that covers three areas: increasing efficiency, reducing costs, diversifying and expanding into new markets, especially in Western Europe. The purpose of this plan is to adapt to the changed business environment and help customers who are looking for opportunities to reorient their supply chains to the West.

 

    This plan is necessary because, compared to last year, LTG Cargo, a railway freight company belonging to the LTG Group, will transport about half as much cargo this year due to the sanctions imposed on Belarus and Russia - about 26.5 million tons.

 

    According to the company, this will be the largest drop in cargo volumes and the lowest amount of cargo transported in the company's history. LTG Group may lose about  150 million Eur income due to a significant decrease in cargo volumes compared to the previous year.

 

    The state plans to provide financing to the Group's company LTG Infra, which manages the railway infrastructure, this year. It will ensure the maintenance of infrastructure, improve the quality of services provided, and offer businesses attractive service tariffs. Public funding will also allow for the continuation of strategic investment projects.

 

    However, the LTG Group says it needs to make decisions to increase operational efficiency and reduce costs. First of all, decisions were made on strict control of operating costs and postponement of some investment projects. The composition of the team is then decided.

 

    It was decided to dismiss

 

    Specific decisions affecting LTG employees were refined through consultations with employee representatives. The LTG Group will say goodbye to about a quarter of executives at various levels. In total, the LTG Group will lay off approximately 2,000 employees, of which approximately 1,200 will work for LTG Cargo, approximately 500 for LTG Infra and approximately 300 for LTG. 6 million Eur. will be allocated for employee severance pay.  Number of LTG Group employees in 2021 June 30 amounted to 8,392.

 

    "Business volumes have shrunk very sharply and noticeably, so decisions have already been made to reduce costs and delay some investments. These painful solutions are now necessary. By downsizing a team, we must secure opportunities for its future growth as we discover niches for further activities. We will also strive to fully help these employees to adapt to the ongoing change, ”says Egidijus Lazauskas, CEO of LTG.

 

    According to him, the LTG Group will seek to continue the most important strategic projects, such as the electrification of the Vilnius-Klaipėda railway section, by streamlining its activities. The aim is also to maintain competitive tariffs in the face of declining activity.

 

    According to Vilius Ligeika, the chairman of the Lithuanian Railway Trade Union Federation, the consultations were constructive, therefore we managed to quickly find the necessary solutions: “We proposed and examined several possible scenarios. We are all well aware of both the need for difficult decisions and the need to protect the interests of workers as much as possible. To this end, we have both planned measures to be provided by the LTG Group and agreed on the involvement of the Employment Service. ”

 

    The number may be lower

 

    Artūras Černiauskas, the chairman of the Lithuanian Railwaymen's Trade Union Confederation, says there is no truth in a circulated LTG report that the possible scenarios were examined in detail during the consultations and only then a final decision was made. He also emphasizes the importance of support measures for workers, especially retraining.

 

    However, he told BNS that several hundred fewer workers could be laid off than the group's management announced.

 

    "According to our calculations, that number is lower than the LTG announces. Not tens, but several hundred. We have agreed that the number mentioned is only the maximum that can be, we will talk about it, we will talk about each position, the regions, the local structure. I was surprised by the statements of the leaders that the information agreed with the trade unions is not quite accurate, ” - A. Černiauskas said to BNS on Thursday.

 

    "Most affected (redundancies - BNS) freight transport - drivers, wagon keepers, conductors, a lot of things related to freight transport from the East, some stations on the Belarusian border are almost conserved, traffic there is almost stopped. "There are still local transports, Kaliningrad transit and few activities that are not subject to sanctions," said A. Černiauskas.

 

    According to him, planning redundancies is essential to assess whether the remaining people will be able to ensure road safety and maintenance, it is unclear how many workers will be needed if grain is transported from Ukraine to Klaipeda port.

    

    “We are talking to workers in the regions, they say there will not be enough people left or the schedules will not match. The managers also emphasized that the situation is not completely clear, who will work and what will not, ”said A. Černiauskas.

 

    According to the president of the trade union, reducing the workload and time while maintaining jobs was also considered, but this option was abandoned.

 

    "We have tried to offer a part-time job and keep the job, but we do not know how long it would take to do so, whether it will last a month or a year or longer. But in that case, salaries and compensations would decrease, so such a decision has been abandoned, this option is only suitable for a specific date, ” -said A. Černiauskas to BNS.

 

    Will offer retraining

 

    The LTG Group has designed a package of support measures for employees that will help ensure that those team members affected by the change have all the necessary information about the opportunities offered by the labor market and take advantage of them.

 

    The specialists of the Employment Service will advise on registration with the Office, inform about the situation in the labor market and vacancies. Also about retraining opportunities and other employment support measures.

 

    "We want to encourage the dismissed employees of the company to choose between the development of competencies or the acquisition of a new qualification, as the Employment Service can offer a very wide range of training programs. Tuition is free and a scholarship is paid for the tuition. The specialists of the Employment Service advise and help to choose the direction of study, and can also mediate in finding a new employer. Thus, with the dismissal, one stage in their professional life will end, but another will begin, which, thanks to joint efforts to improve their professional qualifications, can be no less successful, ” - says Inga Balnanosienė, Director of the Employment Service.

 

    LTG will also have a call center that will advise employees on the issues of the Labor Code, and employees will be able to contact and check the information they care about. Career fairs with potential employers are also planned, during which it will be possible to obtain useful information about possible jobs throughout Lithuania.”