Reuters reported that Hungarian steel maker Dunaferr, one of Hungary's biggest employers, would lay off 400 workers and offer early retirement to several hundred more to survive the financial crisis.

The unit of Ukraine's Donbass Group said that the job cuts were needed as its cost-cutting measures launched at the end of last year had proven insufficient to deal with falling demand and a poor economic outlook, and as unions had rejected its offer of a four-day work week.

Dunaferr said on its website that it would cut 300 full time and 100 temporary jobs by the end of August and offer early retirement to several hundred employees. The company reported a pretax loss of more than HUF 15 billion in the Q1 saying it was worse than its guidance set out at the end of last year. However, Dunaferr said parent Donbass remained committed to its Hungarian investment, despite a 40%t drop in Q1 sales revenues.

Dunaferr said "Donbass Group, a key player in central and eastern Europe's steel market, is committed to its long-term presence in Hungary and is convinced that the current crisis does not threaten these aspirations. It said its workforce would total about 7,200 employees after the restructuring.

Dunaferr said it was in talks with the government over a loan and some form of subsidy but negotiations had been hampered by the collapse of the minority Socialist government, which posed a further risk to the company's financial standing.

(Sourced from Reuters)