The management of Hisense Gorenje held a meeting with representatives of SKEI trade union of Gorenje and Hisense Gorenje Europe. The management presented in detail the severe impact of COVID-19 epidemic and following global economic crisis on the business performance of Hisense Gorenje companies and the crisis measures the company needs to take also in the meeting with the Minister of Economic Development and Technology Zdravko Počivalšek and State Secretary Aleš Cantarutti. While the management emphasized that the set redundancies process needs to go through and will continue, they discussed together with the Minister the possibility of finding additional options to use as many soft methods as possible and to mitigate the consequences of the redundancies for those employees who will lose their jobs. Both parties decided to communicate closely with a goal of finding these additional options.
«After the coronavirus epidemic hit Europe – they say from the company – we saw a significant decrease in orders already in March (by one third), in April the orders decreased even by two thirds and the trend of at least 25% order decrease will continue also in May and June. Global economic crisis we’re facing in the aftermath of the coronavirus pandemic will be seriously affecting the market demand across Europe for a longer period of time.»
Although Hisense Gorenje closed 2019 with over 40 million euro loss and was still in the process of restructuring, change of business models and reorganization, the measures implemented last year to improve efficiency and profitability gave good results in January and February 2020. The first two months were better, compared with 2019, but because of the epidemic things changed completely in March. The company was expected to generate 1.1 million euro profit, instead it generated 11 million euro loss, totalling 20 million euro loss in the first quarter. In the first half of the year due to market demand drop and consequential drop of orders it is expected over 40 million euro losses.
«We implemented several crises measures to mitigate the consequences of the severe revenue drop. – the company explains in a press release -. We are focusing on sales increase, shifting to e-commerce and on-line sales, we are cutting costs, continuing to increase production efficiency and lowering the material costs. The entire Hisense Group management salaries were reduced by 20% – 50%. The final and the most difficult measure we need to take is decreasing the number of employees.»
Lan Lin, the Chairman of Hisense International expresses the resolution of guarantee the Group survival in this very critical situation. «There is a global economic crisis ahead of us and we need to make sure the company survives. – the Chairman underlines -. In order to compensate the profit loss there are only two things to do: one is to sell more with a bigger margin, the second one is to cut cost. This is a tough job. This year the overall reduction of the number of employees has to be done to maintain healthy operation conditions. We need to do this hard work and save every penny we can. Of course, we are aware this will have a negative effect, with our workers and with the general public. We don’t want to do that, but we are forced to because of the situation, not only ours, but many other companies are facing as well, throughout Europe and the world.»
