Eimskip bosses take pay cut to ward off job losses

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Troubled Icelandic containership and reefer owner Eimskip has cut the salaries of its highest earners by 10% and laid off 72 employees in Iceland and across Europe as it struggles to cope with a substantial drop in imported cargoes fuelled by the collapse of the Icelandic Krone, writes Sean Moloney from Reykjavik.

While exports soar on the back of cheaper krone-based export prices, fewer Eimskip vessels are now serving the island, down to eight from a previous 11. To avoid substantial lay offs,the company has decided that the salaries of those earning more than ISK300,000 will drop by 10%. Shift working and overtime has also been limited in this latest cost-cutting phase.

Eimskip believes it will save around ISK2.4 billion through these latest moves with ISK550 million coming from the lower salary costs.

Gylfi Sigfusson, Eimskip CEO and President said: “Just as any other company in Iceland, Eimskip is going through a rough period, notably in the import sector. On top of that, the situation in the international transport and financial markets is proving to be a difficult one. In light of this, Eimskip has few choices but these substantial arrangements. Of the two bad choices we had to make, it was more feasible in our minds to lower the salaries of those employees with an income above ISK300,000 than having to lay off even more employees in these difficult times that the Icenlandic nation is facing.”

The move coincides with reports that Eimskip has been fined ISK 20m ($178,000) by the country’s financial watchdog for not disclosing the serious trouble its UK warehousing subsidiary Innovate was in earlier this year.