Porvoo city council launches collective bargaining with potential for 50 layoffs

Porvoo city council has initiated broad collective bargaining negotiations that could lead to up to 50 layoffs and 200 temporary furloughs or reduced working hours, Yle reports. The move aims to cut personnel costs by approximately €4 million amid worsening economic conditions.

The city, which employs around 1,900 permanent and 500 fixed-term staff, states that personnel expenses account for roughly 55% of its operating budget. The proposed measures include:

• Up to 50 layoffs
• Up to 200 temporary furloughs or reduced working hours
• Non-renewal of 15–30 fixed-term contracts
• Leaving 15–20 vacancies unfilled after retirements or resignations
• Transferring 10–15 employees to another employer through outsourcing

The city council attributes the cost-cutting measures to a projected decline in shared municipal tax revenue, which is expected to drop from nearly €41 million in 2025 to €12–13 million annually by 2027–2028. Without adjustments, Porvoo’s budget is forecast to run a significant deficit in those years.

Porvoo currently spends about €3,000 per resident on services, compared to an average of €2,500 in larger Finnish cities. The council aims to reduce overall expenditures by at least €8 million (3% of total spending) by 2027. A final decision on the cost-saving program, including personnel reductions, is expected in June, with implementation by the end of 2026.