Anonymous comments, ostensibly by the company's employees, started appearing on local websites a few months ago raising fears about the state of DLRR.
DLRR is the largest train engine maintenance company in the Baltics and also manufactures and repairs train parts. It employs about 550 people in the eastern city of Daugavpils.
Even though representatives of the company could not be reached, a guard at the premises told Latvian Radio that the factory is operational.
"Previously we had problems as there were the [anti-Russia] sanctions and there was no production. However now everything seems to be stabilizing. There's some action, and what's most important is that they're paying wages," another employee told Latvian Radio.
Valērijs Kononovs, head of the Daugavpils branch of the State Employment Agency, said that people have indeed being sacked, however it is not happening en masse.
About 80 former employees have turned to the employment agency from March 1 to May 24, including electricians, locksmiths, assemblers, etc.
The Daugavpils City Council is informed about the company's troubles, according to mayor Jānis Lāčplēsis.
"We of course are trying to monitor the situation, and the number of jobs and employees has decreased significantly there [at DLRR], which is cause for concern. What's worse is that we don't have reliable information about orders for next year," said Lāčplēsis.
According to current data, DLRR has operated with losses of €1m in Q1 2016.
LETA reports that consolidated net sales of DLRR last year were €19.2m, up 4% from 2014. DLRR finished the year with losses of €2.7m compared to losses of €1.1m in 2014.
The largest shareholders in the company are Estonia's Skinest Rail with 47.97% and Estonia's Spacecom, which belongs to the Russian transport group Severstaltrans, with 25.27%, and Estonia’s LLC Lokomotiiv Investeeringuud with 15.37%, according to LETA.