Hafnarfjörður weighs asset sales after municipal layoffs

Hafnarfjörður is considering selling municipal assets and delaying planned investments to improve its finances, Mayor Þórður Þórarinsson told mbl.is.

The town’s council on Thursday approved eliminating 23 positions, equivalent to 21.6 full-time posts. Three employees will be offered other jobs, leaving a net reduction of 18.6 full-time posts.

Þórarinsson said no further layoffs are planned and that the measures already approved should be sufficient to reduce staffing. Further savings will still be needed, including through asset sales, lower operating costs and changes to municipal procurement. Some planned investments may also be postponed.

The council began discussing the town’s finances on Thursday and set targets for improving its operations. Work on the measures will continue over the coming weeks, with a second discussion of the budget due in the town council in early December. Þórarinsson said he could not comment on possible increases to municipal tax or other charges because proposals remain confidential.

The council also decided to freeze the mayor’s and department directors’ salaries for two years. Hiring will be restricted, with appointments outside core services requiring approval from a special hiring committee.

Þórarinsson said the town would seek to ensure the layoffs and organisational changes did not affect services to residents, though minor disruptions in the first few days could not be ruled out. Hafnarfjörður estimates the savings measures will generate 330 million Icelandic krónur in recurring annual savings from 2028. The town says it needs to improve its operating results by at least 3 billion krónur a year to secure a stable financial footing.