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Polish furniture manufacturer forced to lay off over 200 employees

A major Polish furniture manufacturer, Grupa Forte, has announced the impending layoffs of 237 employees due to a challenging financial situation and market stagnation. The decision is attributed to a decrease in furniture purchases in Poland, with consumers hesitating due to high inflation.

The restructuring, set to incur approximately 3 million PLN in associated costs, is expected to result in an annual reduction of personnel expenses by around 16 million PLN, according to Forte Group's board of directors.

The move to downsize employment within the group appears to be a response to deteriorating financial results. Fabryka Mebli Forte, a subsidiary of the group, published a preliminary report on its performance for the nine months of the fiscal year starting April 1, 2023, and ending March 31, 2024. During this period, revenues amounted to 758 million PLN, reflecting an 18% decrease compared to the same period in 2022.

Over the nine-month period, the estimated EBIT loss amounted to 4 million PLN, marking a substantial deterioration compared to the 56 million PLN profit in the same period the previous year. Additionally, during the three months from October to December 2023, the company recorded an EBIT profit of 8 million PLN, lower than the 35 million PLN profit in the corresponding period of the previous year.

The Forte Group explained that a negative one-time impact on the EBIT for the third quarter of the fiscal year 2023-24 was due to the formation of a provision for labor costs, with a reduction of 3 million PLN. The actual costs associated with the employment reduction at Forte Group are expected to be around 3 million PLN, as opposed to the initially anticipated 7 million PLN.

Forte Furniture Factory is a company based in Ostrów Mazowiecka and has been manufacturing furniture since 1992. According to the financial report for 2022/2023, Forte employed just over 2,550 workers as of the end of March 2023, with the production department constituting the vast majority at 1,770 people.

Source: Biznes

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