The supervisory board of the Estonian state-owned railway logistics company Operail has approved the management board's proposal for the restructuring of its Tapa depot, as a result of which the company will cut 21 jobs and direct more resources toward locomotive construction.
"This is our strategic management decision," Operail CEO Raul Toomsalu said according to a company press release. "We have recognised that in the current situation, it is important to direct more of the workforce than before toward more profitable business directions, which locomotive construction undoubtedly is."
As a result of the restructuring, Operail will suspend wagon repairs at its Tapa depot, cut 21 jobs, and send another 37 employees, primarily welders, automators and wagon locksmiths, for retraining in order to ensure the necessary resources for the locomotive construction business area.
"We are also working closely together with the Estonian Unemployment Insurance Fund (Töötukassa) to find new employment for our people as quickly and painlessly as possible," Mr Toomsalu noted. "We have continuously expanded our activity and created new jobs. In 2018, we grew by 49 employees — we began the year with 645 workers and totalled 694 by December."
According to Operail supervisory board chairman Kuldar Leis, the decision was made for economic reasons.
"The wagon repair services provided by Operail's repair business unit at the Tapa depot have not been profitable for the company in recent years as they depend to a great extent on the market situation in neighbouring countries," Mr Leis explained. "For wagon repairs, we cannot compete with depots where labour costs, materials and spare parts are cheaper. With this step, Operail is confirming the general trend in Estonia of doing work that is smarter and has extra value added, and focussing less on work that is outsourced or subcontracted.
According to the company, however, other services will continue to be provided at the Tapa depot at current volumes.
"Wagon wheel set inspections and fabrication will continue, and we will also continue repairs at our service points," Mr Toomsalu said. "We will definitely continue to focus on freight transport and wagon rentals, and we will pay more attention do digitisation and providing services to new markets in the coming years."
Editor: Aili Vahtla