Hafnarfjörður is cutting jobs and streamlining

Hafnarfjörður is cutting jobs in its administration and making savings of around 330 million per year.

• It is necessary to implement austerity measures in light of the town's tight financial situation.
• A total of 23 jobs will be eliminated, corresponding to 21.6 full-time equivalent posts.
• A hiring freeze will be introduced and a special recruitment committee will be established.
• Executive pay in the municipality frozen for two years.
• Emphasis is placed on safeguarding statutory core services for residents.

The Hafnarfjörður Town Council approved the mayor's proposal for efficiency measures in the town's central administration at its meeting today. In total, 23 posts will be abolished, equivalent to 21.6 full-time posts, while three employees will be offered other posts with the council. This results in a net reduction of 18.6 full-time posts.

The measures affect all six of the council's departments: the Department for Children and Families, the Department for Education and Public Health, the Department for Services and Development, the Finance Department, the Administration Department, and the Department for Environment and Planning. The adjustments are projected to yield 330 million króna in permanent annual savings from 2028. Furthermore, restrictions on hiring will be introduced and a special central recruitment committee will be established. The salaries of senior management will be frozen for two years.

The optimisation measures are part of a response to the City of Hafnarfjörður's tight financial situation and are intended to secure its future operations. The emphasis is on reducing administrative costs, simplifying the organisational structure, and safeguarding core services for the town's residents.

Extensive analysis and milder measures considered

Over the past few months, extensive analysis of the council's operations, structure and staffing has been carried out with its management team. Ways to reduce costs with minimal impact on staff and services have been sought, including through staff turnover, the reallocation of tasks and the consolidation of roles. The measures that have been taken are based on detailed analysis and the council's half-year accounts.

The reduction is aimed primarily at management and specialist roles, as well as roles in internal services, and not at positions providing daily basic and front-line services. Four management posts are being cut, three of which are department head positions.

No further redundancies are planned.

Tightened recruitment rules and austerity in senior management

Vacancies will not be automatically refilled, and recruitment for positions outside the core service will be subject to the approval of the recruitment committee. It will remain permissible to recruit to cover normal staff turnover in nurseries, primary schools and homes for people with disabilities, provided certain specified conditions are met.

The financial situation calls for action

The City of Hafnarfjörður's half-year accounts show that the operating deficit for Section A amounted to 2.36 billion krónur, whereas the budget had forecast a surplus of 435 million krónur. The variance amounts to almost 2.8 billion krónur and is explained, among other things, by lower revenue from the sale of building rights, increased operating costs and a rise in finance charges. It is estimated that the town's annual operating performance needs to be improved by at least 3 billion króna to ensure a solid core operation. The measures are therefore part of a wider round of cost-cutting and increased austerity, which will be taken into account when drawing up the 2027 budget.

Thórður Þórarinsson, Mayor: „It is a heavy burden to have to make decisions that affect people's jobs and livelihoods. These are skilled and capable staff who have made a great contribution to the town, and I would like to thank them for their work. We have worked hard to find less severe ways to make adjustments, but unfortunately, redundancies are unavoidable. We are emphasising that the changes are handled properly and that staff receive appropriate support.

The financial situation of the City of Hafnarfjörður is difficult, and we must respond to it with resolve and responsibility. We are demanding greater restraint in recruitment and operations. This is the first step in a larger project which is about getting a grip on our operations, reviewing our priorities and safeguarding our core services. The aim is to ensure that Hafnarfjörður continues to have the means to provide its residents with a good service,“ says Þórður Þórarinsson, Mayor of Hafnarfjörður.