New economy: When EPS will start laying off workers on the orders of the IMF

Although we learned last month that the Serbian leadership promised International Monetary Fund (IMF) that he will implement rationalization in Electric Power Company of Serbia (EPS), does not necessarily mean that it will actually be done.

We have been hearing about EPS being "forced" into line for decades, but it is clear that state enterprises are the prey that political leaders will have the hardest time letting down the drain, writes Aleksandra Nenadović for New Economy. There are plenty of reasons, and in the case of Serbia, extracting money and guaranteeing safe votes from this company would harm all the political plans of the ruling party.

What does the IMF say?

Given that layoffs in the EPS have been mentioned for years, New Economy asked the IMF when we can expect this to come into effect, but also according to which formula the next correction of the electricity price for citizens will be made.

"Cost reduction measures are important in order for EPS to become a more market-oriented and competitive company, which would benefit Serbian households and companies. We do not have a time frame for this measure, but this is an important next step within the EPS restructuring plan ordered and approved by the government. We expect regular indexing of electricity tariffs 'CPI plus', which is important for ensuring the financial viability of state-owned enterprises in the energy sector, and at this stage we leave the details of the time frame to the Serbian authorities," the Fund's answers state.

We have seen this kind of promise to other international economic organizations before, and the politicians in Serbia skilfully avoided this, just as they avoided mentioning what they had promised the IMF.

It is a regular phenomenon in Serbia that the intentions and plans of the political authorities are not disclosed, and that the responsibility is equal to zero.

NE did not receive answers to these questions from the Ministry of Mining and Energy of Serbia.

No layoffs in an election year

Željko Marković, a former director in EPS who is now in private entrepreneurship, expresses doubt that the state will decide on layoffs in the election year because it is not a popular solution.

"The process of systematization and reorganization has been going on for ten years. EPS has gone from a headquarters with subsidiaries (such as Kolubara and TENT) to a large conglomerate," says Marković. "There is a clear surplus of employees in the administration, where people do not do much, while in production, where the hump needs to be pulled, workers are constantly missing. The proposal is to offer those in the administration retraining for work in production, and if they do not want it, a mutual termination of the employment relationship. The state rarely decides on classic layoffs; more often programs are offered for those who are a few years short of retirement with the payment of severance pay."

Marković points out that qualified craftsmen are often happy to take severance pay because there is a high demand for them on the market. After leaving EPS, they open independent shops or work privately because they are professional and experienced.

Political and social obstacles to dismissal

He notes that it is psychologically difficult for a director to make a decision to lay off 200 people because there is always a risk of personal conflict or a reaction from those who lose their jobs. Before the dismissal itself, it is more likely that certain positions will be eliminated and salary ratios reviewed in order to make financial savings, he thinks.

And financial savings have already been made, but only based on the correction of the price of electricity for users, which increased EPS's earnings somewhat, but not to a sufficient extent, because at the same time the largest investments are being delayed. Whether the move to rationalize the workforce will be next in line is difficult to say, knowing how much the Serbian political elite love their armchairs. But also knowing that the position of blackmailed workers is the easiest to gather the necessary votes in the elections.

Drastic drop in EPS profits

The realized profit of 42,3 billion dinars in 2025 is "significantly better than in 2024." said Minister of Energy Dubravka Đedović Handanović during the presentation of the results.

Just two years ago, in 2023 to be exact, EPS reported a profit of 114 billion dinars (almost one billion euros) when Minister Handanović praised the team that embarked on the reform of this company. At the time, she said that this reform was more than challenging, considering that nothing had been done on that front for decades. The changes have started, but they must be faster and better, the minister said at the time.

The following year, however, was no better, as the profit of EPS in 2024 was 222 million euros, even four times less than the year before. Considering that the rationalization of workers has been talked about for so long, and nothing is actually happening about it, the unions that function within the EPS have become significantly quiet since the start of the faster and better change in 2023.

Marković says that unions have a habit of keeping quiet while their employer pays them funds for loans or sports games, and they call for help only when the situation becomes critical. He concludes that in this system "everything is politics".

The party is responsible for everything.

Vladimir Vujanović, a worker employed in EPS, a founding member of the trade union, tells Nova Ekonomija that the management mentioned that layoffs or some other form of systematization were being prepared.

He describes the systematization as a "hot potato" that no government wanted to start because of political influences and the strength of the trade unions.

"The union was previously unique and had great strength because of the events of October 5, so everyone ran away from that problem and postponed it. Although the reorganization and systematization should have been done, it is not being worked on and has not even been started. I doubt that it will happen in the election year because the moment is sensitive," he says.

Production workers (like shift workers) believe that systematization is necessary, but only if it is fair. This would imply that people who are not adequately employed are offered a choice: either you will do what is necessary in this company or you will simply take the social program and leave it, adds Vujanović.

There is a clear imbalance: there are too many employees in the administration, while there is a lack of workers in direct production, according to our interlocutor. Many workers formally have "manufacturing solutions" but have been transferred to offices through political or union connections and do not work in production. Vujanović expresses great doubts about the fairness of the systematization process, because "the party is in charge" both in the state and in the EPS, and they manage all decisions.

Vujanović cites a direct example from the Polje E mine, where the director claims that there are 2.800 workers in production, while in reality there are not even 2000 in the field. Although an increase in the number of people (in production) is requested, the management tells the workers that there are already enough of them, waiting for the workers to solve the problem themselves.

It is stated that there has been no mass recruitment of new workers for years; recruitment is done mostly "party-wise via quotas".

So far, nothing from the energy transition

The workers are aware that there will be a gradual reduction in coal production and, therefore, a reduction in the number of jobs, emphasizes the EPS worker. But although there is a need to transfer personnel from the coal sector to the renewable energy sector, that process has not yet started, he says.

The process has not started, most likely due to delays in large investments in RES. The strategic project for the construction of 1 GW solar power plants with battery storage is a project contracted in October 2024 that was supposed to "achieve the goals of the energy transition and fulfill international obligations, and the need to import electricity will be eliminated and ensure long-term supply to consumers at economically affordable prices." The project is delayed and construction should have started this year. It is not known when it will be available online.

"The goal is for the price of electricity in Serbia to become attractive for foreign investors who will invest in green energy and renewable sources. This is a systemic process in which there will be a large number of private power companies that will produce electricity and sell it to the state, and the state to citizens. The transition will not be sudden, but it is expected that by 2030, with the introduction of taxes and the construction of new facilities, the changes will become more intense (for workers)," said an EPS employee.

For years, EPS kept "social peace" through cheap electricity, but it states that this has come to an end.

Source: New Economy

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