Tallink Grupp, owner of the shipping line of the same name, says it is making around 130 people redundant at its hotels in Estonia and Latvia.
The company said in a press release Wednesday that it notified the Estonian Unemployment Insurance Fund (Töötukassa) that it was commencing a collective redundancy process at one of its subsidiaries, TLG Hotellid (Tallink Hotels), and had notified employees of the start of the process.
As a result of the process, approximately 130 positions are to be laid off at Tallink Hotels in Estonia and Latvia, the company says.
In addition, the group's management has critically evaluated the resource requirements of onshore personnel in the next six to twelve months, with some redundancies are also expected in the company's other subsidiaries and business areas, Tallink Grupp says.
With travel and tourism at a standstill due to coronavirus emergency restrictions, the company's hotels are not doing business. Just one of its hotels, the Tallink Express Hotel in the harbor area of the Estonian capital, is still partly open.
At least a year to recovery
The company says it is likely to take at least a year to a year and a half until the accommodation sector is able to recover from the fallout from the current crisis, based on its assessments.
"Today, we are in the situation, where we had to very quickly, yet at the same time, very constructively and with good foresight, and evaluate our need for staffing for the period of the next six months to a year, without knowing exactly what that period will actually bring," said Paavo Nõgene, CEO of Tallink Grupp.
Nõgene also said that by not filling vacant posts at the company, the number of redundancies could be mitigated to an extent.
"As for the rest of the group, we have made the decision to reduce positions in areas where our activities have significantly declined, or stopped completely. As far as possible, when reviewing the staffing situation, current vacancies within the company have not been filled, and as a result the actual number of people will not reduce significantly."
Nõgene also highlighted the government's aid package, which it was likely to lean on in the near future, adding that the core business of its shipping line was not in jeopardy at present, so far as jobs went.
"Indeed, the Estonian Government has created an aid mechanism in support of employers, which will be of great assistance to the company during the next two months; we were hoping that these instruments will help us to keep all jobs within our company. We have managed to keep most jobs intact and the redundancies do not affect one of the largest employee groups at Tallink Grupp – our ships' crew and onboard personnel at present. However, we must look ahead to the more distant future, and since market recovery will take more time, we are unable to continue today with the same number of employees as before the crisis."
The government, via the Unemployment Insurance Fund, will be able to cover up to 70 percent of staff salaries, to a maximum of €1,000, for a two-month period, in the case of companies in serious difficulty from the effects of the pandemic.
Tallink continues to operate cargo routes daily, including the Megastar, which sails six times per day between Tallinn and Helsinki. The vessel is theoretically available to passengers, but since Finland is imposing a bar on all incoming ferry passengers this week, in practice it means the journey would be one-way, for instance for Estonian citizens and residents based in Finland who wish to return. Even then, arrivals would face a 14-day quarantine period, under the government's emergency situation measures.
Nõgene also said that reallocating existing employees to posts is also on the table.
"We will continue to do our best to offer, where possible, those employees whose positions are made redundant, other posts within the company, " Nõgene concluded.
Editor: Andrew Whyte