Most privatized enterprises tend to preserve or increase the
number of workplaces. This is related to the fact that up to now
privatization has essentially involved the creation of new private
enterprises or expansion of the activity of already operating ones.
To some extent the increase in employment is also due to the fact
that preserving or increasing the number of jobs is stipulated as a
condition in the contracts in most privatization transactions. As
indicated by the study, that condition was present in the contracts
of 4 out of the 5 enterprises, with only one of them having made
500 workers redundant. (see Table 4).
The data about concluded large privatization transactions show
that of the transactions concluded by the Privatization Agency
(they all fall within the category of "big privatization
transactions"), 7 included a condition of termination requiring the
creation of new jobs, in 5 of the contracts the condition was to
preserve existing jobs, and only 2 included no such clause, with no
information being available about the rest.
The commitments concerning the number of jobs are related to
agreed additional investments. Such commitments have been made in
more than 45% of the concluded transactions.
The results of the survey refute the common assumption that
privatization leads to job cuts. Only less than 10% of all
privatized enterprises in the country reduced the number of
workplaces, and the rest either increased or preserved existing
jobs. The reason for this specific to Bulgarian privatization
phenomenon lies in the fact that privatization in Bulgaria was
delayed. During the pre-privatization stage, owing to the
limitation of state subsidies (see Table 6), there were significant
personnel cuts in the state-owned enterprises, and in some cases it
even fell to a level below the minimum necessary for the normal
operation of the enterprises. The phenomenon "unpaid leave" turned
into a mechanism for mass discharge of labor force.
In this respect, however, Bulgaria is not unique. "The empirical
analysis of the Chilean experience shows that the change in
ownership related to privatization does not in itself affect
employment but leads to greater efficiency without bringing about
an increase in the general level of unemployment".(1)
ENTERPRISE SUBSIDIES AS A SHARE OF THE STATE
Source: State Budget Bill for the resective year
The data from the survey indicating an increase in the number of
workplaces in the privatized enterprises ought to dispel the fears
of privatization of the employees and the trade unions.
The increase in employment also results from the general
expansion of production and enhanced efficiency of the overall
activity of the privatized enterprises.
Another characteristic tendency related to the organization of
labor in the privatized enterprises is the change in working hours,
with modifications in the organization of shift work. Furthermore,
there appears to be greater interchangeability and rotation,
especially in the enterprises bought by the staff.
(1) Dominique Hachette and Rolf Luders,
Privatisation in Chile: An Economic Appraisal, ICEG, 1993, p.
In all of the studied enterprises the system of remuneration of
labor was changed after privatization. The common tendency was to
change the relative share of, or abolish payment by the hour and
replace it with piecework or a payment-by-results system. In view
of the size and characteristics of most of the privatized
enterprises, the relative extension of the piece rate system of
labor remuneration is often combined with internal economic
differentiation of separate structural units and occasionally even
The observed tendencies in employment and organization of labor,
even if of a fragmentary and non-representative character, are an
indicator of extensive increase in the employed labor force and the
effectiveness of labor in most enterprises privatized to date.