BUDAPEST, Hungary (AP) -- Jeans and apparel maker Levi Strauss said Friday it would close its factory in Hungary because of falling demand for its products amid the global economic crisis.
Levi Strauss said it has agreed with trade unions on a severance package for the 549 people who will lose their jobs by the end of June, when the factory in the southern city of Kiskunhalas is scheduled to close.
The factory, which mostly makes jeans, opened in 1988, when Hungary was still under communist rule.
The company's commercial office in Budapest and Levi's stores in Hungary will not be affected by the decision, the company said in a statement.
Hungary's unemployment rate has been rising steadily in the past few months, from 7.6 percent in December 2008 to 8.7 percent in December 2009.