Icelandic company Vélfag announces a 30% staff reduction and emergency plan, citing a conflict with a bank and government minister
In response to what it describes as “unprecedented and hostile actions” by Arion Bank and the Ministry of Foreign Affairs, the Icelandic company Vélfag has implemented an immediate 30% staff reduction.
The job cuts are the first phase of an emergency plan adopted by the company’s shareholders, board, and management to ensure its survival.
The company states that the measures were taken in response to “sanctions” imposed by Arion Bank and the Ministry of Foreign Affairs, led by Minister Þorgerður Katrín Gunnarsdóttir. According to the company, these steps are intended to force the formal expropriation of the majority shareholder or to pressure the minister into lifting the sanctions.
A representative for the majority shareholder expressed frustration with the situation, stating, “It is deeply alienating that a country aspiring to join the European Union has yet to grasp the definition of the rule of law and the core European values—such as property rights. This disregard now results in numerous families in Iceland losing their livelihoods.”
Vélfag was founded in 1995 by Bjarmi Sigurgarðarsson and Ólöf Ýr Lárusdóttir in Ólafsfjörður. The company has a history of innovation in the fishing industry, focusing on solutions to increase the utilisation, yield, and quality of fish. Vélfag built the world’s first stainless steel filleting machine and has expanded from sea-based to land-based processing, selling its machinery globally.
Statement – Vélfag Takes Emergency Measures
In light of the unprecedented and hostile actions taken by Arion Bank and the Ministry of Foreign Affairs, led by Þorgerður Katrín Gunnarsdóttir, against Vélfag, the shareholders of the company—together with its board and management—have decided to implement an immediate 30% reduction in staff as the first step in an emergency plan.
The termination of employment contracts marks the initial phase of this plan, which was adopted in response to the sanctions imposed by Arion Bank and the Icelandic Ministry of Foreign Affairs. The measures are intended to ensure the company’s survival until Þorgerður Katrín Gunnarsdóttir decides either on the formal expropriation of the majority shareholder or on the lifting of the sanctions.
“It is deeply alienating that a country aspiring to join the European Union has yet to grasp the definition of the rule of law and the core European values—such as property rights. This disregard now results in numerous families in Iceland losing their livelihoods. I doubt it was worth it, and I know it helps no one,” stated the representative of the majority shareholder.