The full impact of the global financial crisis may not yet have taken hold on Bulgaria, but already the country has seen a number of job losses and announcements that some firms are rethinking investments.

Machine builders and electronics makers are feeling the full brunt of the crisis with car battery maker Monbat and starter and torque batteries maker Elhim Iskra planning to eliminate further jobs amid darkening sales outlooks, Dnevnik reported on December 12.

"We reduced our staff by 28 people late last month and early this month. At this stage we cannot say whether there will be a further reduction but there may be if sales continue to fall," Elhim Iskra investor relations head Albena Dimitrova said.

On December 11, Monbat unveiled plans to lay off 120 employees, but said that more jobs could be lost as the economic crisis tightened its grip on the European economy. The jobs cut amount to 15 per cent of its workforce. The company is also clamping down on raw materials and consumables costs and aiming at 20 per cent lower transport costs.

If global demand continues to weaken there may be workforce reductions, said Vladimir Spasov, investors' relations head at M+S Hydraulic, the hydraulic motors manufacturer, which has so far kept intact its 1800 headcount.

Falling orders, though, have in recent months slashed 180 jobs at peer Hydraulic Elements & Systems (HES).

More companies will revise staffing levels as the crisis feeds in into the real sector, according to Nadya Nedelcheva, portfolio manager at Karoll Capital Management.

Withdrawal
On December 10, Greek business newspaper Imerisia reported that Greece's Alpha Copy, the authorised Nokia distributor for the market, is pulling out of Bulgaria under the weight of the worldwide financial fallout. The shake-up is aimed at cutting operating costs in response to partners' requirements.

Alpha Copy operates in Bulgaria via its local subsidiary, Alpha Copy Bulgaria, Nokia's first authorised dealer for the market.

On December 8, Dnevnik reported that Bulgarian mining and processing company Kaolin was to cut about 10 per cent of its workforce in a move to cut costs in the face of the global economic crisis.

The firm will also reduce output from some operations to streamline production costs and avert fat gas bills after prices were raised by 23.89 per cent from October with a new hike due to take effect in January.

Amid continuing news of job cuts and caution among investors, Parliament's committee on the budget and finance voted on December 11 to accept a proposal by Labour and Social Policy Minister Emilia Maslarova to amend legislation making it possible for workers who are switched to half-day work to be paid compensation by the State. The intention is that employers will not have to cut jobs while cutting costs by reducing working hours.

Hassen Ademov, an MP for the Movement for Rights and Freedoms and a member of Parliament's committee on labour and social policy, said in an interview with Bulgarian mass-circulation daily 24 Chassa that unemployment would be the most important social issue in 2009, and he called for unemployment benefits to be raised from the 110-220 leva approved by the committee to 120-240 leva.

`Positive effect'
In an interview published by Trud on December 11, Bulgarian Chamber of Commerce and Industry deputy head Krassimir Dachev said that good workers would not lose their jobs, and the crisis would have a positive effect because it would remove "non-market phenomena" from Bulgaria's economy.

However, figures that emerged in mid-December were grim, with the National Statistical Institute reporting a 1.9 per cent decline in industrial production in October, with some sectors, including ore mining, having shrunk by 50 per cent. Sales in the textile industry had gone down by 20 per cent and in metallurgy by 15.5 per cent.

Figures released on December 1 by European statistics service Eurostat, unemployment in Bulgaria in October was 5.6 per cent, significantly lower than the European Union average of 7.1 per cent and the eurozone average of 7.7 per cent. Unemployment in Bulgaria in October 2007 was 6.2 per cent.

Going by the Eurostat figures, unemployment in the EU is increasing, albeit from historically low levels.

On November 20, Bulgaria's Employment Agency said that in October 2008, unemployment in the country had increased for the first time this year. It reported a figure of 2000 people having become unemployed, meaning an official statistic of 216 644 jobless. However, the October figure was influenced by seasonal factors, with people having lost their jobs after have been temporarily employed in the tourism, agriculture, construction and processing industries.