Carlo Gavazzi Limited announced Friday that a restructuring exercise will lead to a progressive reduction and eventual closure of operations in Malta.

The company announced in a statement that this development is shaped by external constraints and the need to consolidate operations across its global footprint.

This reflects a combination of long-term challenges, including year-on-year revenue pressures driven by rising global costs-such as tariffs, supply chain expenses, and ESG-related requirements-the increasing need for regionalization of the business, highly competitive landscape for recruiting skilled talent in Malta, and the ongoing consolidation and restructuring of the Carlo Gavazzi Group.

While this decision will bring the Group's longstanding presence in Malta to a close, it does so with deep appreciation for the decades of collaboration with the Maltese Government and the dedication of its local workforce, the company said. Carlo Gavazzi "is grateful for the close collaboration that characterised its operations in Malta over the years and is committed to ensuring that this process is conducted in a transparent and respectful manner".

"We are approaching this process with care and respect for all those affected" the Group's Chief Executive Officer said. "Our priority is to ensure that the process is conducted in a fair and dignified manner, with open dialogue and support for our employees and stakeholders throughout."

The company said it has commenced constructive discussions with the relevant governmental authorities and employee representatives. These are aimed at ensuring full compliance with applicable legal obligations, while also seeking to mitigate the impact on affected employees. As part of this process, the Company is actively exploring ways to support its workforce, including financial incentives and seeking opportunities with related entities.

Carlo Gavazzi Group remains committed to innovation and long-term value creation. Looking ahead, the Group will focus on consolidating its core business areas and enhancing operational resilience and long-term sustainability across its international network.

The General Workers' Union (GWU) was the first to break the news, saying Friday it has been formally informed by the management of Carlo Gavazzi Limited of the company's intention to wind down its Malta operations.

In a meeting held this morning at the company's request, the Swiss-based multinational announced a phased closure of its Bulebel manufacturing plant, which will lead to a progressive reduction of its entire workforce of 140 over the coming months. The company's official statement cites a restructuring of its affiliate, with production of products previously manufactured in Malta being moved to other Group locations, particularly plants in Mexico and China.

The GWU said it is meeting with all employees at the plant today to communicate the situation and begin the process of consultation. It is understood that the first redundancies will not take effect for at least seven months.

"This is a serious blow to a loyal and long-serving workforce who have given decades of their lives to this company," said GWU Secretary-General Josef Bugeja. "Our absolute and immediate priority is the welfare of these 140 workers and their families. The GWU will use its full strength and resources throughout the consultation period to ensure every single employee's rights are rigorously upheld and to secure the best possible outcome in this difficult situation."

A central part of the upcoming discussions with the company will be to negotiate measures to mitigate the effects of the redundancies, including the best possible compensation packages for all affected staff. In parallel, the GWU will immediately enter into discussions with the Ministry for the Economy, Malta Enterprise, and other private companies to explore all avenues for absorbing the affected employees into alternative employment.

Carlo Gavazzi has been a fixture of Malta's manufacturing landscape for nearly four decades, the GWU said. Established in 1988 as a small assembly operation, the Maltese workforce was instrumental in transforming the plant into a fully-fledged R&D, product management, and manufacturing centre. In 2006, the Group itself designated the Malta plant as one of its principal production locations, a testament to the skill and dedication of its local employees.

The GWU has now formally entered a 30-day consultation period with the company.

In a separate statement that followed, the Ministry for the Economy, Enterprise and Strategic Projects said it was informed by Carlo Gavazzi International that, in view of the company's regionalisation strategy, it will be relocating its Malta-based plant to Mexico and China in the coming months.

The Ministry said it is deeply concerned about the impact of this decision on the dedicated employees who have contributed to the company's success in Malta over many years. Their wellbeing and future are our immediate priority.

The government has already initiated discussions with Carlo Gavazzi and other key stakeholders to ensure that every affected worker receives full support. This includes assistance in securing alternative employment and access to training opportunities where required.

Malta's robust labour market continues to generate demand for skilled talent, and the Government remains committed to working closely with industry to align these opportunities with the workers impacted by this development.

The ministry will maintain ongoing communication with employees and their representatives to safeguard their interests throughout this transition.

The Government of Malta said it is dedicated to fostering a dynamic and resilient economy. "We will continue to support initiatives that promote innovation, sustainability, and job creation, while reaffirming our commitment to the growth and competitiveness of Malta's manufacturing sector."