New Wave of Mass Layoffs in Iceland Skip to content

New Wave of Mass Layoffs in Iceland

More than 30 workers at the brewery and soda factory Ölgerdin Egill Skallagrímsson have been laid off, as announced yesterday, while some of the brewery’s remaining 250 employees have been asked to reduce their work percentage. Other companies also announced layoffs yesterday.

A construction site in Iceland in 2008. Many construction workers have lost their jobs in recent months. Copyright: Icelandic Photo Agency.

To prevent further layoffs, Ölgerdin asked workers who earn more than ISK 350,000 (USD 2,800, EUR 1,900) per month to give up a 3.5 percent salary increase, to which they are entitled according to their wage contracts, reports.

“On top of general economic difficulties, Icelandic industrial companies are now dealing with a higher tax burden, which means a significant market recession. They also have to face a higher excise tax and value added tax,” a statement from Ölgerdin CEO Andri Thór Gudmundsson reads.

Gudmundsson said it is unfair that a so-called sugar tax is being placed on unsweetened fruit juices and sparkling water when Kókómjólk, chocolate milk, and Cocoa Puffs, chocolate cereal, are exempt from it.

“The past year of operation, from March 2008 to March 2009, was the best in Ölgerdin’s history. The layoffs are therefore neither a result of operational difficulties nor past investments,” the statement continues.

Ölgerdin recently moved all of its operations into new facilities on Grjótháls in Reykjavík, which used to be in eight different locations, which will save the company money in the long run, its executives state.

Contracting company KNH in Ísafjördur announced that 60 of its 84 employees had been laid off because of the government’s changes to the taxation system on top of a lack of projects. KNH is the largest company in the West Fjords in the field of road construction, reports.

“To reduce the number of projects undertaken during times of economic crisis is the exact opposite of what should be done. During crisis the state should launch public projects to support the country’s economy, which is already in poor shape,” the website of the West Fjords’ Labor Union reads.

It was also announced yesterday that contracting company Eykt had laid off 11 employees, which is not defined as a mass layoff. However, RÚV calls yesterday’s news the worst wave of layoffs in six months.

Click here to read more about unemployment in Iceland.

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