Silvarom targets 20% cost cuts through monthly budgets

Silvarom Bucuresti, one of the leading Romania-based furniture manufacturers, set itself as a target to cut costs by 20%, with a budget calculated on a monthly basis for each department of the company. The cost cut is similar to the sales decline recorded since the beginning of the year. "We have set ourselves spending caps, for every department and for every individual cost. For the production department, for instance, costs are not to exceed 95% of the sales made by the department," said Ioan Marginean, Silvarom's financial manager. One of Silvarom's departments set a monthly budget of 226,000 euros (950,000 RON per month or 7.6 million RON over 8 months), which means spending cannot exceed 214,000 euros. As concerns salary costs, the company's almost 400 employees go on unpaid leave for a week per month, with Marginean saying this is a method of averting redundancies.