Construction company Skanska has said it will leave Estonia by the end of 2014, citing EU-wide structural problems in the sector and its own objections to contracting terms on the local market.
The departure could potentially spell the loss of 120 jobs, but Skanska AS director Andres Aavik said the number of layoffs in Estonia will be fewer, as some of the units will be sold off.
Skanska Oy's deputy director general Tuomas Särkilahti made the announcement today, citing the size of the market and stiff competition. "The prospects for 2014 on the local market appear to be weak," he said.
"Project income streams are generally negative and contractors have unlimited liability, which we find hard to accept. In such a situation, we have decided to leave the Estonian market."
Skanska said it would complete projects in progress and discharge its obligations to employees and cooperation partners, pledging career counseling for all employees who so desire.
The construction sector has exerted a slowing effect on the economy this year and no rapid turnaround is expected. The main reason for the slowdown is diminished levels of EU structural funds in the new multiyear financial period set to begin next year.