18.10.2024 14:41
European companies have not slowed down in layoffs in the second half of the year amid a stagnant economic outlook. Due to the additional costs imposed on companies by high interest rates, job cuts are occurring consecutively across many sectors.
European companies have not slowed down in layoffs in the second half of the year amid a stagnant economic outlook.
In Europe, decisions to lay off employees are being made to reduce costs due to weak consumer demand, which is attributed to the ongoing effects of the Russia-Ukraine War on economies, structural issues in Germany, and tight monetary policies implemented against high inflation.
INTEREST-INFLATION CYCLE HITS COMPANIES
High inflation, which has remained elevated compared to pre-pandemic levels, has reduced households' purchasing power, while raising interest rates to combat inflation has increased the cost of credit for companies' investments. The resulting economic downturn is reflected in the employment decisions of many of Europe's leading companies, which have experienced declines in sales and profits. Layoffs, which have spread across almost all sectors, including automotive, engineering, chemicals, banking, manufacturing, technology, and oil, have not slowed down as of the second half of this year. Recently, France-based aerospace and aircraft manufacturer Airbus announced its decision to reduce up to 2,500 positions in its Defense and Space division by mid-2026. The distribution of large European companies that have made layoff decisions since the beginning of July this year is as follows:
ENGINEERING, AEROSPACE, AND DEFENSE
Sweden-based battery manufacturer Northvolt announced last month that it plans to lay off 1,600 employees, including 1,000 positions at its Northvolt Ett factory in the Skelleftea region. The company's statement indicated that some cost-cutting measures would be taken to increase production capacity at the factory in the face of challenging macroeconomic conditions, and these measures are expected to result in layoffs. France-based aerospace and aircraft manufacturer Airbus announced this week its decision to reduce up to 2,500 positions in its Defense and Space division by mid-2026.
RAILWAYS, TELECOM, AND CHIPS
German railway operator Deutsche Bahn announced in July that it would lay off 30,000 employees, corresponding to about 9% of its total workforce. Swedish telecom operator Telia also announced that it would part ways with approximately 3,000 employees this year, joining the ranks of other European companies that have decided to reduce their workforce. German chip manufacturer Infineon announced in August that it would cut 1,400 positions worldwide and relocate these positions to countries with lower labor costs. Poland's largest freight transport company, PKP Cargo, announced in July that it plans to lay off 30% of its staff. Finland-based information technology and telecommunications company Nokia has also been reported in international media to plan to lay off 350 people in Europe as part of its cost-cutting efforts. The company is also planning to reduce its workforce by 2,000 in China.
BANKING
Norway-based DNB bank announced in September that it would terminate the employment of 500 full-time employees within six months. Italian bank UniCredit announced on October 17 that it had reached an agreement with the labor union for the voluntary layoff of 1,000 employees and the creation of 500 new jobs.
RETAIL AND CONSUMER GOODS
Home appliance manufacturer Dyson decided in July to lay off approximately 1,000 people in the UK as part of a global restructuring plan. Consumer goods company Unilever also announced in July that it plans to reduce all office positions in Europe by one-third by the end of 2025.
ENERGY, PHARMACEUTICALS, MEDIA, AND OTHER SECTORS
Reports have emerged in international media that energy company Shell plans to reduce its workforce in oil and natural gas exploration by 20%. Pharmaceutical manufacturer Indivior announced in July that it would lay off 130 employees, while a Norwegian fertilizer producer stated this week that planned production changes at its facility in Belgium could result in the layoff of approximately 115 employees. A Finnish forestry group also reported last week that it might part ways with about 110 employees at its Fibres Finland facility. The company announced in August that 338 people would be laid off due to the closure of its factory in Germany, and 59 people would be laid off due to the closure of its biocomposite facility in Finland and Germany. Swiss media company Tamedia announced in August that it would close two of its printing houses and terminate approximately 300 employees.
LAYOFFS IN THE UK AS WELL
The British media giant BBC announced this week that 155 people would be laid off. As part of a plan to save £700 million annually, the BBC is expected to reduce its costs by £24 million through these layoffs. Reports have also emerged in the media that English Premier League club Manchester United plans to lay off approximately 250 people as part of a club-wide layoff program.