Hundreds of jobs in the shoe industry are to go after a German shoe manufacturer Ara Shoes announced it was closing one of its factories in Romania and would ax jobs at a second plant this year over rising costs, a paper reported
The company said it would shut its factory in the town of Simleul Silvaniei in northwest Romania and cut an unspecified number of jobs at the factory in Valea Lui Mihai which has some 600-650 employees.
The company said the decision was based on repeated hikes in the minimum wage in Romania, daily Ziarul Financiar reported.
Salaries in the shoe manufacturing industry are 2,105 lei a month, about 35% lower than the average monthly wage.
Ara Shoes entered the Romanian market 20 years ago and invested 20 million euros in its two factories. The group has a share of 5% of Romania’s shoe exports, the paper reported.
Separately, Ara Shoes holds stakes in two other shoe producers, loyd Shoes Romania and Legero Shoes Romania in Bihor county, which are managed independently.
The company’s footwear is sold at Otter retail outlets which are present in malls and shopping centers around Romania.
Swiss shoe producer Rieker also closed both its factories in Romania in 2019 after 21 years, blaming the decision on a difficulty in finding workers, increased wages and low productivity.
