Slovak aluminium producer crippled by high energy prices, plans for a mass layoff

The Central European nation, Slovakia's sole aluminium producer, Slovalco, which Hydro majorly owns, will be laying-off its maximum number of employees due to higher fuel and emissions constraints and lower aluminium prices. As a result, the company's stakeholders are considering shutting down its aluminium smelter completely.

As per our regional report, around 300 employees of the company out of 450 will be unemployed. The Žiar nad Hronom-based aluminium company said, "the final number of laid-off employees remains uncertain. A further 2,500 jobs in the region that are tied to aluminium manufacturing are now at risk."

The layoff and production curb information has already been floated inside the aluminium producer's site. Even though Milan Vesel, Slovalco's CEO, has warned about the scenario since 2021.

The high cost of electricity has affected a significant employer in the region. Aluminium production at the facility has already been reduced by 40% in the last few months.

The company has yet to deliver the official statement about the staff layoff. However, it is anticipated that the Norwegian majority shareholder Hydro and the Penta investment group will disclose the news. A government led by Eduard Heger, interested in Slovalco when the situation cannot be changed, is unlikely to make any difference.

The employees of Slovalco are already aware of this distressing information. In a tentative arrangement, the shareholders have promised them above-average severance compensation.