News

27. October 2008

Group layoffs due to economic recession

The past few months’ substantial contraction in the Icelandic economy and the economic consequences of the financial crisis have caused a dramatic cooling of the construction and real estate markets. Because of the considerable uncertainty about securing new projects, Iceland Prime Contractor was forced to lay off 151 employees. A further 19 will be offered other positions within the Company or will reduce their employment percentage. The layoffs, which have been reported to the Directorate of Labour, affect employees from all occupational groups within the Company. Over 400 employees will remain with IPC, in addition to a few hundred who are employed by subcontractors.

The people who lose their jobs will be advised of their rights and will receive assistance with the job search process and related matters. IPC’s managers will attempt to assist all departing employees to the best of their ability.

In a few short months, the operating premises for companies in the construction and contracting sector have taken an abrupt turn for the worse. After the failure of Iceland’s banks, the situation has deteriorated still further, and the future of many projects is quite uncertain. The public sector has abandoned or postponed planned tenders for new construction, and individuals and businesses have shelved their construction plans for the present. In view of these circumstances, senior executives at Iceland Prime Contractor are of the opinion that a severe contraction in the contracting and construction market can be expected in the next few months.

IPC will remain one of the mainstays of the Icelandic construction contracting sector, however, with over 400 employees on its payroll and several hundred more working under the aegis of subcontractors. The Company is engaged in a number of large and interesting projects and will continue to be an active participant in the construction market.

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