Schwan-STABILO, the German maker of cosmetics and stationery, said Friday it planned to shift nearly a third of its workforce to the Czech Republic in the next three years in a cost-cutting drive. Around 400 jobs from the 1,400-strong workforce at the group's factory in Heroldsberg near Nuremberg would be relocated to the Czech Republic by 2008. The first 100 jobs would go in the second half of this year, chairman Ulrich Griebel said. Primarily affected would the wage-intensive production of cosmetics, such as eyeliners, lipsticks and cosmetic crayons, Griebel said. High wage costs meant that the products could not be made at
competitive conditions in Heroldsberg. Negotiations with unions and employee representatives over longer working hours and a reduction in bonuses for Saturdays and night shifts had failed, making job cuts inevitable, he said. Compulsory layoffs would be avoided where possible through internal transfers or retraining. Griebel blamed the move on increased competition from rivals in Asia and price pressure. Furthermore, the strength of the euro was harming exports into the dollar region, which accounted for 65 percent of sales. In all, Schwan-STABILO had fared well in the business year that ended June 30, 2004, Griebel said. Net profit rose by eight percent to €12 million ($15.5 million) and sales were up three percent at €281 million. At the end of June, Schwan-STABILO employed 2,900 people worldwide.