Leoni, a major automotive cable factory in Pleven and one of Northern Bulgaria's largest employers, will shut down its operations by the end of the year and exit the country. The company plans to begin the gradual layoff of its approximately 1,300 workers starting in September, as announced at a press conference on Thursday. Employees were briefed on the situation yesterday before the public announcement, according to a report by Club Z.

The cessation of production will be a gradual process, and the company will require employees during this transition period, noted Andrey Kosukhov, managing director of Leoni Bulgaria EOOD. Kosukhov described the decision as economically driven, influenced by an unfavorable mix of factors, and expressed gratitude for the constructive dialogue with local institutions.

Sven Schmidt, head of Corporate Communications at Leoni Group, elaborated that while the closure significantly impacts the local community, it was a necessary move due to the challenging economic climate and the volatility of the global automotive industry, which has seen fluctuating orders.

Leoni, which employs around 95,000 people across 27 countries and reported total consolidated sales of 5.1 billion euros in 2022, cited the lack of a sustainable long-term perspective for the Pleven plant as the primary reason for the closure. The company has been present in Bulgaria since 2018. Challenges in reliably hiring enough local workers and high inflation were also factors in the decision.

Following the factory's closure, the Bulgarian subsidiary will enter liquidation. The decision was made after careful consideration of all options, and the company will provide compensation for its workers. At its peak, Leoni employed about 2,000 people in Pleven, a number that has since decreased. The company recently launched a new production line valued at 22 million euros at its facility in Nis, Serbia.