Gert Tiivas, head of the Unemployment Insurance Fund, said the government ordered the public sector to reduce its costs in 2024.  

"In short, the directive stated that operating expenses must be reduced by 10 percent. That's what we are following. Our goal is to implement this next year. We are trying to do it all at once, not piece by piece," he said.

Tiivas said, for the first time in the fund's history, it is aiming to significantly reduce operating expenses.

"Since the majority of our operating costs — nearly two-thirds — are related to personnel, this inevitably means a substantial reduction in the number of employees. The estimate of 170 is correct, but I cannot give an exact number today," he continued.

The main focus will be on reducing levels of management and not impacting customer service.

"We simply do not need so many management layers. We can manage the organization significantly more effectively and reduce the number of managers," Tiivas said.

"We're making these changes where there's room to tighten the belt so that clients do not suffer. The changes affect the entire organization. There are no sacred cows. This, of course, includes the central office and all support functions, including the communications department," he added.

Tiivas also said that many people do not want to visit an office, but instead seek support or counseling online. "Which means counseling can be done more efficiently and with fewer staff," he added.

Reforms will help young people find work

The new strategy has three priority areas: reducing unemployment among young people, upskilling the over-50s, and ensuring the workforce's skills match employers' needs.

"The Fund continues to do all the things we've always done. Clients definitely have no reason to worry — on the contrary, the new strategic objectives approved by the board on Tuesday mean we are setting significantly more ambitious goals for getting people into jobs and helping the most vulnerable groups. We aim to do things better and help people into work faster," Tiivas said.

The reform will not include reducing or shortening the period of unemployment benefits, he added.

"The main direction of the new strategy is that the fund must change because the labor market has changed. Society's expectations have also shifted, including expectations that the public sector—and the fund as part of it—must become more efficient," Tiivas said.

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