Mirroring the actions of TDK in March 2006, when it was announced that the company would close its production site in Bascharage, Technicolor followed suit on 17 January and announced that it would be closing the doors on its production factory in Schifflange/Foetz. Nearly 224 workers are affected. A high percentage of these are cross border workers and the large majority are French. This is indeed, extremely bad news for the Technicolor staff as well as for Luxembourg. In both cases, the companies site similar reasons - a global glut of DVDs on the market, a rise in production costs and a fall in prices - which are squeezing the competition.

The Ministry of Economy and Foreign Trade released a statement that they had been in contact since the end of 2004 with Technicolor's European management in order to examine the possibilities of maintenance of all or a part of the activity in Luxembourg. The government expressed their deep regret that these efforts did not succeed and that no option appeared viable in the long run.

Speaking to paperJam, Danielle Jacob who is responsible for Technicolor Media Relations in Luxembourg, said that, "No global press release had been issued from the company on 17 or 18 January because we wanted to inform our employees first. Our priority now is to the 224 employees. We need to focus on communication and try to help them identify and find new employment. We will be working together with the government to give them the tools and techniques for this process."

Technicolor is part of the Services division of Thomson. The closure is part of a global restructuring of DVD replication and packaging by Thomson's technical and home entertainment services. Jacob says that, "The reasons for the restructuring are changing market conditions for DVDs and the maturity of the format. At first there were fantastic sales of the DVD format - everybody was buying - but now the market is ready to decline. This slowdown is creating pricing pressure. The consequence is Thomson's intention to cease its production activities in Luxembourg and in Wales. Technicolor will maintain its production in Piaseczno, Poland, which operates on a different scale."

An exact date of cessation cannot be declared until after management meets with the social partners on 22 Monday in January.