ABB to lay off up to 250 finance center staff

ABB Source: ERR

International energy and automation technology group ABB is to its financial services center in Estonia at the cost of at least 200 jobs, ETV news show 'Aktuaalne kaamera' (AK) reported last Friday.

ABB has been operating in Estonia virtually since the restoration of independence, but says the development does not relate to current wage costs in the country.

The news follows an announcement last summer that ABB would be withdrawing its electricity distribution equipment production facility from Estonia, with around 100 job losses.

Peter Mitchell, ABB's Head of Financial Services Europe, said: "We decided to do this to further harmonize, simplify and standardize our processes specifically within finance in ABB, and moving from here to fewer locations on a global level, so the work is going to existing ABB teams within the company."

While the finance sector is currently experiencing rapid wage growth in Estonia, Mitchell said this was not the reason for the move.

He said: "Not at all. There is still relatively a good salary base [in Estonia] if we compare and look at external bench-marking."

"It was not a money-driven decision, it was purely based on harmonization of our processes and simplification of our finance end-to-end structure," Mitchell continued.

The  Estonian Chamber of Commerce and Industry (ECCI) concurs, with spokesperson and head of the chamber Marko Udras saying that wages in Estonia are not such that the country is no longer attractive to larger, international firms.

Udras told AK that: "At the moment, this is still an isolated case and I don't think it shows that there is anything very bad in the Estonian business environment or that other international companies will start taking jobs out of Estonia soon or tomorrow. /.../ But no doubt we still have to constantly look at the competitiveness of our business environment."

ABB will retain its financial units in Poland and India, AK reported.

ABB's main areas are the production of generators, actuators, electrical switchboards etc. and the sale of transmission networks, low-voltage equipment etc.

While no changes are planned in these areas, beyond those announced last year, the business service center will lose jobs providing financial support, with 200 to 250 people being laid off.

ABB's Ülemiste site will retain around 80 employees, mainly in HR.

Those being made redundant will be offered opportunities to continue work in the group, AK reported, while around 6,000 comparable jobs are on offer – i.e. in the field of accountancy and audit.

Siim Sarapuu, head of the Unemployment Insurance Fund (Töötukassa) Harju County branch said that: "About an hour-and-a-half ago I was contacted by a representative from PriceWaterhouseCoopers who said they would be starting a campaign next week looking for accountants and auditors, so our potential collaboration is underway," adding that other companies in the same field were likely to get in touch.

Last August, ABB announced its equipment production facility would be leaving Estonia, leading to just under a hundred job losses. The factory had up to now been based in Jüri, just outside Tallinn, and had employed around 1,000 people all told.


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Editor: Andrew Whyte

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