LEONI to gradually stop the production in Malošište

Due to a lacking long-term strategically and financially sustainable continuation perspective, LEONI Bordnetz-Systeme intends to initially downsize and then cease the production of its plant in Malošište by end of the year 2025. The main reason for the decision is the significant loss of the projects carried out at the plant. This hardly allows LEONI to continue its predominantly manual production in Malošište at a profitable level. The downturn of the European automotive industry further aggravated the situation.

Despite the exceptional engagement of the employees at the Malošište plant, the teams at LEONI Serbia and the efforts of the Group, we regretfully had to state that the viability of this plant could not be preserved. LEONI has been facing an increasing economic burden from its plant in Malošište, negatively influencing the overall financial result of the Group.

Nevertheless, the company did not take the decision to close the site. The company and its employees have jointly taken various initiatives to stabilize the performance, such as efficiency improvements and right-sizing. However, unfortunately, it has not been possible to establish a perspective for a sustainable continuation of the Malošište plant, since its competitiveness is too low to attract further projects.

LEONI Group thanks everyone who is employed at the Malošište plant, as well as everyone who previously worked at this plant, for their efforts. 

Unfortunately, about 1.900 jobs will be phased out gradually until the end of 2025. The decision was announced today to the employees of this plant.

LEONI is aware of the hardship of the decision for its employees and for the local community around in Malošište. Accordingly, the priority of LEONI Serbia is now to provide support to the employees who will be affected by this decision, by providing a social program. The company has decided to provide a severance pay amount that is higher than the legally prescribed minimum. Employees whose employment contract will be terminated will be provided a severance pay in the amount of 50% of one gross monthly salary for each full year of service with the company. In this way, the company provides support that goes beyond legal obligations, recognizing the contribution of employees and the seriousness of this change.

LEONI continuously examines the performance of all projects and plants globally. At other locations in Serbia - Prokuplje, Niš and Kraljevo, the company is also facing an increase in costs, and in addition, there is a noticeable lack of labor. As things stand today, apart from the plant in Malošište, the other three plants in Serbia continue to work on ongoing projects.

After the closure of the Malošište branch, LEONI Serbia will employ about 8 000 people and thus continue to be one of the largest industrial employers in Serbia.