Economy 17 April 2025, 8:18am

Mass layoffs at Liberty Dunaújváros could affect thousands of workers

Portfolio

Around 2,600 employees may be affected by collective redundancies at the Dunaferr steelworks in Hungary.

According to an internal letter obtained by Portfolio, the liquidators of Duna Furnace Dunai Vasmű Kft. and Dunarolling Dunai Vasmű Kft. have announced their intention to implement collective redundancies in accordance with the Labour Code of 2012.

The letter states that negotiations regarding the collective redundancies will begin at least seven days after the written notification is provided, with the obligation to negotiate remaining in effect until an agreement is reached or for at least fourteen days after the start of negotiations.

The letter was signed by Zénó Petrik, Chairman of the Works Council of Dunarolling Dunai Vasmű Kft., László Hegedűs, Chairman of the Works Council of Duna Furnace Dunai Vasmű Kft., and Zoltán Magyar, President of the DUNAFERR DV. Metalworkers' Union Federation.

Portfolio understands that the collective redundancies could affect up to 2,600 workers.

The story so far in a nutshell

Recently, it was revealed that liquidators are seeking buyers for certain business units of the former Dunai Vasmű (Dunaferr), specifically Dunarolling Dunai Vasmű Kft. and Duna Furnace Dunai Vasmű Kft. through participation notices.

By the end of 2022, Dunaferr was facing severe financial difficulties. The company's operations became impossible, and it entered liquidation on December 14, 2022. The government provided HUF 16 billion in support to cover employee wages for six months to prevent complete shutdown and mass layoffs.

During liquidation, Dunaferr's assets and active contracts were transferred to two new companies, Duna Furnace Dunai Vasmű Kft. and Dunarolling Dunai Vasmű Kft. These companies were purchased by Liberty Steel Central Europe Kft., a British-Indian company, in October 2023 after EU approval. Liberty Steel paid EUR 55 million for the companies.

The companies acquired by Liberty Steel were unable to maintain production, partly due to low steel prices and uneconomical operations. The blast furnace and steel mill were shut down in August 2023. Due to lack of substantial activity, the companies accumulated debts, and in November 2024, the Budapest Metropolitan Court initiated liquidation proceedings against both companies.