Estonian Railways has been tasked by the Ministry of Climate to reduce its costs by €15 million over the next four years.

"We need to review our entire cost base and make cuts in various areas, from railway maintenance expenses to employee-related costs. We are currently in a significant investment period, during which we will invest over €500 million in railway renewal over five years, and we need employees for this. On the other hand, the number of employees at Estonian Railways has already been reduced by more than 10 percent in the last five years. We are operating efficiently today, so we do not have a major layoff plan at the moment. However, we are forced to freeze wages, meaning we will not be able to increase salaries," explained Andrus Kimber, deputy chairman of the board of Estonian Railways.

Most of Estonia's major state-owned companies, from Rail Baltic to the Port of Tallinn, fall under the Ministry of Climate's jurisdiction. State-owned companies are required to make the same level of cuts as government ministries.

"Five percent in 2025, 8 percent in 2026 and 10 percent in 2027. The initial savings will come from reduced subsidies, but these are often smaller than the cuts required, so additional reductions in operating costs will also be necessary in these companies," explained Keit Kasemets, secretary general of the Ministry of Climate.

Nordica, Operail and Saarte Liinid will be exempt from these cuts. Elering is not a state-budgeted company and the government does not interfere with the Port of Tallinn, as it is a publicly traded company.

Additionally, the government intends to increase dividend payments from its companies. "There is not much room to increase dividends. In 2025, the dividend volume in the state budget has been increased by €1.6 million," Kasemets said.

RMK has not received a cost-cutting directive, but due to the state's increased dividend expectations, the company will need to find areas for savings. RMK Director Mikk Marran stated that the company has issued a preliminary warning to the Unemployment Insurance Fund regarding the potential layoff of 80 employees.

"Our directive to managers was to identify savings across all areas, targeting around 10 percent. The exact areas where these savings will come from are yet to be determined, but I must say we aim to cut about 10 percent from labor costs," Marran said.

Tallinn Airport is in a similar situation, with the government also setting higher dividend expectations for the company.

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