Swiss company to cut 400 jobs in Ukraine as war's toll continues

Vetropack Holding SA

18/05/2022 07:46

ZURICH, May 18 (Reuters) - Swiss packaging group Vetropack
 VETN.S  on Wednesday said it would cut roughly 400 jobs in
Ukraine following severe war damage to its Hostomel plant, a
sign of the widening economic toll of the fighting in Ukraine.
    The manufacturer of glass packaging, which has employed
roughly 600 at the plant, northwest of Kyiv, said it had
continued to pay full salaries of its people there since
Russia's invasion of Ukraine while releasing them from work
duties.
    But now, with damage from military activity rendering the
plant inoperable for the near future and hostilities continuing
in the region, the company said it would need to let go roughly
two-thirds of the workforce.
    "We are aware of the impact this step will have on our
employees in Ukraine – but we see no alternative at the moment,"
Chief Executive Johann Reiter said in a statement. "In our
estimation, it will not be possible to immediately resume our
production in (Hostomel) - even if the war ends, which is
currently not foreseeable."
    Around 4.8 million jobs have been lost in Ukraine since the
start of the Russian invasion, accounting for around 30% of
Ukraine's workforce, the International Labour Organization said
last week, as the conflict shut down businesses, strangled
exports and drove millions to flee.  urn:newsml:reuters.com:*:nL5N2X296Y
    Russian forces seized Hostomel, which is close to an
airfield, soon after invading Ukraine on Feb. 24.  urn:newsml:reuters.com:*:nL5N2W445B
 urn:newsml:reuters.com:*:nL2N2WB158
    Vetropack said it had no plans to permanently close its site
and hoped to reopen it following repair. But in the medium term
it could perform only clean up and "protection and preservation
of assets".
    Without the site operating, the company said it was not able
to keep up payments to employees.
    "Financing these jobs is directly related to the production
and sale of glass packaging. Therefore, without production, we
cannot sustain it," Reiter said.
    The company said it would look for possible solutions for
the affected employees over coming weeks, noting however that
most, as men of military conscription age, were not able to
leave Ukraine.
    Some 35 employees had so far been relocated abroad,
Vetropack said. Some of those were working at other company
sites.

 (Reporting by Brenna Hughes Neghaiwi; Editing by Bradley
Perrett)
 ((brenna.neghaiwi@thomsonreuters.com; +41 58 306 77 35;))