Tungsram to Discontinue Traditional Lamp Production

Tungsram will stop manufacturing traditional lighting products and will lay off 1,600 workers in several phases by the end of the year, the company told the state news agency MTI on Wednesday.

According to the statement, the technological change is unavoidable, and the planned redundancies will mostly affect factory workers in all five factories.

The factories will continue to operate, with Tungsram focusing on three business areas: energy-efficient lighting modernization, parts and components manufacturing, while offering advanced LED solutions for outdoor, industrial and tunnel applications, they said.

The company management informed employees, the works council and trade unions of the decision on Wednesday. "This is the only way for the 125-year-old Hungarian export company to remain competitive on the world market. The planned measures mean saving the jobs of 1,500 people," the statement said.

The first to be cut will be at factories in Kisvárda and Hajdúböszörmény in NE Hungary. The workers affected by the first phase will be laid off in two months.

They added that the redundancies will be carried out in accordance with the Labor Code and in compliance with the regulations. The company also wants to take care of its workers, so information days on job opportunities in the area will be organized with the involvement of the local employment office. They offer help with CVs and job search, and their local HR staff also organize job fairs.

CEO Joerg Bauer said in a statement that Tungsram's management has been aware since 2018 that demand for traditional lighting products was declining and that change was needed, so the company has consciously started to build new businesses. The effects of the pandemic, the war in Ukraine, skyrocketing energy prices and the shortage of raw materials have all caused significant difficulties for Tungsram. The company was hit by these external shocks at a sensitive moment, when it was still a young company in its independent life after the buy-out from GE in 2018, and was in the process of transforming itself and building a new, innovative business to replace its old businesses. The company's management sees the way out as rethinking the company's structure and building a smaller, smarter, more flexible and sustainable Tungsram.

According to the announcement, the company will continue to focus on serving customers as best as possible during the reorganization, primarily from stock. This stock has been consciously built up to meet their contractual obligations over the past year and further steps are being taken on a business unit by business unit basis, and customers will be kept informed of these.