The Leoni company in Malošishte stopped production and fired all the workers. Why did Leoni, who was among the seven largest exporters from Serbia, decide to fire 1.900 workers?
As announced, production at the company's facility Leoni in Malošište, it was suspended, and the last workers fired were last week, it was confirmed for "Vreme" in that company.
Thus, in this place in the municipality of Doljevac, 1.900 people who were employed in this factory of the automotive industry lost their jobs.
"As the Leoni Srbija company announced to the public in a statement published on July 3, 2025, production at the Malošishte branch ended in mid-December," according to the response that "Vreme" received from that company.
Due to the closure of the factory in Malošishte, the employment contract with 1.900 people was terminated, in stages according to the announced schedule.
"They were paid severance pay: for each full year of service in the company, 50 percent of the average monthly gross salary earned in the last three months. This is 50 percent more than the minimum severance pay prescribed by law."
Each employee received a different amount of severance pay depending on the years of service in the company and the average of their last three earnings, and each employee was paid personal income and paid taxes and contributions from the beginning of 2025 until the last working day, the answer reads.
The reasons for closing this factory are the lack of a long-term, strategic and financially sustainable perspective.
"The main reason for this decision is that the factory in Malošishte was operating at a significant loss and Leoni Group was not able to continue its predominantly manual production at a profitable level in this factory," the answer states.
The reasons for the bad business are a combination of internal and external factors, that is, economic conditions in the country and the crisis in the European auto industry, the company added.
Commenting on the wave of layoffs in the south of Serbia, in companies such as Benetton, Geox, and partly Leoni, Serbian President Aleksandar Vučić recently justified the "significant increase in wages", which deters industries that invested in labor-intensive activities.
Several thousand workers lost their jobs in companies in the south of Serbia this year alone.
At other locations in Serbia - in Prokuplje, Niš and Kraljevo, the company is also facing an increase in costs, but despite the challenges, these factories are currently continuing with operations and the implementation of existing projects, according to the company.
"The Leoni company has existed in Serbia since 2009 and until now has only operated with the rise and expansion of production. The crisis in the European automobile industry as well as the increased costs of doing business in Serbia led to the shutdown of one of the four branches. It is a very hard blow for those who lost their jobs, for the company itself, as well as for the local community, but it was inevitable under the given circumstances. The company remains committed to the responsible implementation of all processes and ensuring the efficient operation of the three remaining factories", it is stated in response.
The Leoni company in Serbia produces cable harnesses for premium class cars of the world's most famous car manufacturers. It employed around 9.000 people in four plants. After the closure of the plant in Malošishte, a little more than 7.000 of them remained.
Leoni's complete production in Serbia is exported, and in 2024 the factory was among the seven largest Serbian exporters.
The first plant was opened in 2009 in Prokuplje, then in 2014 the now closed plant in Malošišt. The factory in Niš was opened in 2017, and in Kraljevo in 2018.
The plant near Doljevac was officially opened in 2015 by the then prime minister of Serbia, Aleksandar Vučić. As it was announced at the time, the value of the investment was more than 21 million euros, and the state provided an incentive of 10,5 million euros, or 7.000 euros per worker. The municipality of Doljevac provided land near the village of Malošište free of charge, wrote N1 at the time. Construction of the factory began in August 2013, and trial production began in April 2014.
Nine years later, the factory was closed.
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