Layoffs shortcircuit the Romanian energy sector

Several important players in the energy sector started to announce significant reorganization plans lately. First were CEZ Distribution and CEZ Services, which said that approximately 300 employees would be laid off, 10 percent of the current total of CEZ Romania's entire staff. According to the general manager of CEZ Romania, Jan Veskrna, 50 workers will be let go and 250 of them will have to take voluntary redundancy.
Why the change just a few years after the Czech company was declared the owner of Electrica Oltenia? “In Romania, CEZ has three times more workers than in other countries where the group has operations. Also, one important aspect that we had to consider is the productivity level, which does not reach our expectations. For instance, in the Czech Republic we do a task with three men and here we complete it with ten men,” said Veskrna. According to company officials the change is necessary because of EU standards and CEZ's intention to improve customer relations.
E.ON Moldova Distribution and E.ON Moldova Supply officials have told Business Review that, at the moment, there are two things curently implemented, voluntary redundancy and early retirement, but numbers will be released to the media only when the programs are finished. “Other reorganization programs will first be revealed to our employees, through internal communication channels. When this process is finished, they will be released to the media,” said Georgeta Dinu, communication & public relations director at E.ON Energy Romania.
According to CEZ officials, reorganization programs were discussed during ACUE meetings. ACUE, the Romanian Association of Energy Utility Companies, has as its members top players on the local market, such as CEZ, Enel, E.ON and Electrica.
Specialists from the energy sector admit that, compared with the European standards, the main local energy firms have way too many staff. “The low productivity is a result of very old equipment and bad management. Another weak link in the equation is the HR policy to hire members of the family and not real specialists. This is also prevalent in other important Romanian sectors, for instance administration. Privatization, where it has succeeded, will replace the surplus of employees with management, technologies and efficient HR criteria,” said Jean Constantinescu, president of the National Institute of Energy Sources Study (IRE).

Investments in layoffs
At CEZ, intense discussions with union leaders started last year. “Former employees will receive compensatory salaries based on the number of months left to retirement, plus a supplementary package, but no more than ten months' salary,” said the CEZ Romania GM. Additional salaries will be paid only to employees who have been with the firm for at least five years.
Analysts say that the situation is a result of the energy sector being ‘protected' from privatization for so long. “There were too many workers and not enough good ones. Now, the privatized companies have to deal with the current situation. The situation gets delicate where companies have implemented big modernization programs. A firm can't recoup its investment if it doesn't increase productivity,” said Constantinescu.
According to Mateo Codazzi, general manager of Enel Romania, the company plans to invest EUR 2 billion in the following 15 years to modernize the network equipment at Banat, Dobrogea and Muntenia branches. CEZ representatives say that company investments stand at around EUR 180 million per year. “These are very ambitious investment plans and we are implementing them for the second year. We hope to recover the investments in eight years. We expect the price of energy to go up, but I don't think it will be a dramatic change,” said the CEZ Romania GM.
Specialists in the energy sector think that all players should run social programs for the laid-off personnel.
“Romania has to have a set of rules to force the energy companies active in Romania to introduce a social component in their HR programs, a measure that will assist the workers who lose their jobs,” said Constantinescu. A first step was taken by CEZ Romania. The company started a social program for workers who lost their jobs, which will consist of a free advice service to help them find alternative employment.

By Dana Ciuraru