Mass Layoffs at Westman Islands Fisheries Company Skip to content

Mass Layoffs at Westman Islands Fisheries Company

By Iceland Review

Vinnslustöðin, a fisheries company in the Westman Islands off south Iceland, announced yesterday its plans to lay off 41 employees and put its vessel Gandí VE up for sale for rationalization purposes.


Icelandic cod. Copyright: Icelandic Photo Agency.

At the same time, the company agreed to pay ISK 850 million (USD 6.7 million, EUR 5.4 million) in dividends, Fréttablaðið reports.

“The dividends are approximately 13 percent of Vinnslustöðin’s equity and a similar amount as the required rate of return the Icelandic State Financial Investments demands from the banks,” said managing director of Vinnslustöðin Sigurgeir B. Kristgeirsson.

“If we look at what was estimated last year, it is approximately five percent of [the company’s] market value. If treasury bonds would be bought today, I believe the required rate of return is close to seven percent,” he continued.

For comparison, the dividends paid in 2011 were ISK 500 million (USD 4.0 million, EUR 3.2 million) and so the increase between years is 75 percent.

Sigurgeir doesn’t rule out other savings measures. “If the company is to survive the levies we must take further actions and make more cutbacks.”

He wouldn’t reveal what such actions would include but stated that the current layoffs are important to keep the company going, although the decision had been difficult to make.

“However, no one should be surprised that this would happen, especially not the country’s government and parliamentarians who approved a significant increase to fishing tariffs in spite of warnings from all directions, including from the ranks of their own specialists and advisors,” Sigurgeir stated.

Among those laid off was the entire crew of Gandí VE, 30 people, and 11 employees of Vinnslustöðin’s processing plant.

Click here to read more about the fishing tariffs.


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