Natuzzi said trade unions and local institutions have signed off on a final agreement to restructure the leather upholstery major’s Italian operations, as first spelled out in an October 2013 plan.

In a release, the company said the agreement “is a fundamental tool for the industrial re-launch of Natuzzi’s Italian plants (both from a qualitative and productive standpoint), representing the final step in the production efficiency and work-related cost reduction processes that have been tested over the past few months in the group’s test laboratory.”

Natuzzi said the pact will allow the company to better allocate workers for more efficiency.

It said its new industrial structure in Italy, based on a lean-enterprise model, provides for plant specialization according to product type and for the completion of the entire sofa production cycle within each plant.

Natuzzi Italia products will be assembled at two Italian plants, Matera-Jesce and Laterza.

Natuzzi said that under the new business structure it will lay off fewer employees, 534, as compared with the 1,506 layoffs foreseen in October 2013. Employment in Italy after the layoffs will be 1,800, officials said. They will work on reduced shifts of about five hours per day on average.

To support its made-in-Italy production, Natuzzi said it has planned investments of 25 million euros in marketing, research and development, and industrial enhancement.

“The agreement signed today is an important step towards the full recovery of our competitiveness and the preservation of jobs at our Italian plants,” said Pasquale Natuzzi, chairman and CEO.

“It is the result of a long journey, during which all players involved have shown a great sense of responsibility and reciprocal trust. We intend to keep on competing globally and exporting our products starting from Italy, that is, the country we continue to believe and invest in. Today, more than ever, we have put our trust in our country, in the ability, commitment and responsibility of our workforce, as well as in the Italian government, for its praiseworthy efforts to modernize our country. Although markets are still unstable and winds of war blow ominously through strategic areas of the world, this agreement represents an encouraging starting point that allows us to look to the future — both our country’s and our own — with greater optimism.”