Cutting Costs, Cuba Begins Handing Out Pink Slips

By REUTERS
Published: October 08, 2010

HAVANA (Reuters) - Cubans faced a harsh new reality this week - dismissal slips - as the government began paring state payrolls in a cost-cutting move that has created job insecurity for the first time in years in the Communist country.

Workers were being laid off in countless industries, from hospitals to hotels, and in the biggest action to be made public so far, employees at a state-owned enterprise, the Special Protection Services Company, were told that the company would be shut down and 23,000 people let go.

It was the beginning of President Raúl Castro's plan to cut 10 percent of the government's work force, or about 500,000 people, by April in the most significant overhaul attempted since he succeeded his older brother, Fidel Castro, in 2008.

The layoffs, intended to improve efficiency and reduce Cuba's budget deficits, are the first major job cuts since the 1960s. About 85 percent of the Cuban labor force works for the state, or more than five million people, many of them in unproductive jobs. The country's population is about 11 million.

Not all Cubans, accustomed to guaranteed employment, have been taking the news in stride.At the Havana Libre Hotel, where many jobs are being eliminated, Communist Party officials had to be brought in to calm down workers, hotel employees said.

At a Havana hospital, a nurse said she was shocked at the magnitude of layoffs. "I expected some job cuts, but not 500 out of our 3,000 employees," she said.

Employees at the Special Protection Services Company, which provides armed guards and other security services nationwide, said they were told of the dismissals on Tuesday.

"They said the entire company was being closed, and we were offered jobs in the prison system, police and traffic," said an employee who asked that she not be identified.

The government has said that workers who are laid off will be offered other jobs, but will have to seek work on their own if they do not take the offers. The government has also said that this month it will begin issuing 250,000 licenses for self-employment to create new jobs and shift many workers from state payrolls to leasing and cooperative arrangements.

Still, a Havana resident said that Cubans were facing something they had not seen for decades. "I understand the need to improve the economy, but it's hard to take after 50 years of job security," she said. "It will be hard to get another state job as they are cutting everywhere."

One effect appears to be that workers, fearful for jobs they once took for granted and often neglected, are taking them more seriously, a local doctor said.

"People used to stay home if they had a sniffle, and now they are going to work even if they are really sick, spreading their colds around," he said.