Cuba plans mass layoffs

Cuba has announced plans to lay off nearly half a million state employees to help revive the communist country's struggling economy.

Laid-off state workers to be urged to try self-employment or private enterprise

Manuel Cardenas repairs shoes in La Habanera state-run workshop in Havana. Raul Castro's government says it will cast off at least half a million state employees by mid-2011 and reduce restrictions on private enterprise to help them find new jobs. ((Franklin Reyes/Associated Press))

Cuba has announced plans to lay off almost half a million state employees and reduce restrictions on private enterprise to help revive the communist country's struggling economy.

The Cuban Workers Federation, Cuba's only legal labour union, on Monday said the country would also reform salaries and increase private sector job opportunities.

The job cuts, affecting roughly one-tenth of the island's workforce, are expected to be completed by next March, the union said in a statement released on state-run media.

An internal Communist Party document obtained Tuesday by The Associated Press said government sectors would get the ax first.

Laid-off workers would be encouraged to become self-employed or join new private enterprises. According to the document, those affected are needed to fill jobs such as raising rabbits, painting buildings, making bricks, collecting garbage and piloting ferries across Havana's bay.

The union earlier said some workers who lose their jobs would be offered employment in agriculture or construction.

Cuban President Raul Castro attends a session of the National Assembly of Popular Power in Havana last month. The empty seat belongs to his brother Fidel. ((Javier Galeano/Associated Press))

The state currently employs 95 per cent of the official workforce as part of a socialist model that has endured for five decades.

"Our state cannot and should not continue supporting businesses, production entities and services with inflated payrolls, and losses that hurt our economy are ultimately counterproductive, creating bad habits and distorting worker conduct," the union said.

The changes are the most dramatic yet in a reform program that began when Raul Castro permanently took over the presidency from his brother in 2008.

Raul Castro has warned for years that the state could no longer afford to subsidize every part of Cuban life, nor pay workers who contribute little.

In April, he floated the idea that up to one million workers were superfluous and must go.

With files from The Associated Press