Staffing levels across state-owned enterprises will be aligned with actual operational requirements by the end of the year as corporate governance systems are reinforced, President Dr Mohamed Muizzu said. Excess personnel beyond true operational needs had been hired primarily to secure political advantage, the president observed.
Upon assuming office, the administration pledged not to dismiss state enterprise employees, President Muizzu noted, ensuring that no personnel were terminated or subjected to structural workforce reductions over the past two years. Recruitment across several government-owned entities had proceeded at volumes multiple times higher than necessary, leaving a substantial portion of the payroll idle while continuing to draw state salaries without performing active duties. To fulfil the administration's commitment to fortify corporate governance frameworks, employees who remain without assigned responsibilities must be dismissed, the president affirmed.
When carrying out terminations across state entities, individual conduct, attendance records, and workplace performance will be systematically evaluated, President Muizzu explained, pointing out that alternative transitional pathways will be arranged for the majority of affected personnel.
President Muizzu pointed specifically to Fenaka Corporation Limited, the state enterprise designated to deliver regional utility services across the islands, noting that "a vast number of people" had been recruited only to remain at home without performing work. While an initial commitment to protect jobs had been maintained, findings from the Auditor General's report demonstrated that the company was "mired in various institutional problems" requiring decisive structural reform, reduced expenditure, and upgraded operations.
"Workforce numbers must be reduced based on performance evaluations, in a manner that best serves the company," President Muizzu stated.
The planned staff reductions form part of broader policy measures to streamline enterprise management, ensuring workforce sizes across all state companies strictly reflect genuine operational demands by the end of the year, the president said. To cushion the economic impact on laid-off workers, the government will provide relief through structured redundancy packages and facilitate access to concessionary loans to assist affected individuals in establishing self-employment or private business ventures.
More than 18,000 employees were added to state-owned enterprises during the previous administration, according to information submitted by the President of the Privatisation and Corporatisation Board to a parliamentary committee. Official records show that this rapid expansion coincided with a marked deterioration in the financial health of the state business sector, alongside mounting concerns over missing employment documentation and unverified personnel records in certain enterprises.