Reacting to a sales decline that began in the fourth quarter of 2008, ECCO has announced that it is reducing its global staff of 16,000 people because the market seems to have settled on a lower level than in 2008. Employment levels will be raised again as soon as the market shows signs of improvement, ECCO said in a press statement.
The job cuts will affect 1,150 people at four major production sites that the company operates in Europe and Asia – not just those in Slovakia and China as reported in the Danish press. It will lay off 265 people in Slovakia, 389 in Indonesia, 396 in Thailand and 100 in China. None of ECCO’s 565 domestic employees are affected.
In 2007 ECCO reduced its production in Portugal drastically, and at the beginning of 2008 the company eliminated 176 positions in Slovakia, keeping only 859 employees there and transferring some of the production to Asia.
It is understood that ECCO has no plans to build a new factory until 2013.
For its part, Gabor Shoes has announced a big reduction in the number of workers employed at its Austrian factory in Spittal, where 240 of the remaining 386 employees will lose their jobs. The factory is the oldest one within the German group. It is responsible for the production of all its prototypes and samples. It already saw the elimination of 170 jobs in November 2006.
Gabor says its decision to reduce capacities in Austria is a consequence of a decline in demand for its good-quality shoes, which are experiencing strong price pressure. Customers are looking for cheaper footwear, says Gabor. Noting that bonuses being given out by the German government for the destruction of their old cars are distorting the customers’ spending patterns, the company indicates that the economic situation is affecting it in Germany and Austria, although its orders are down especially from other countries.
As announced at the end of last year, Gabor closed one of its factories in Slovakia in March. Located at Liptovsky Milulas, it was producing uppers for its other factories in Slovakia and in other countries, employing 450 people.
The bulk of the group’s production is now concentrated at Banovce in Slovakia, where it has 1,182 employees, and at Silveiros in Portugal, with 1,008 employees. About 250 employees work at Gabor’s head office in Rosenheim.