One in five Czech construction and industry companies plan to dismiss workers

A survey by workforce solutions firm ManpowerGroup found that 20 percent of employers in certain industries such as industry, construction, and services plan to lay off their workers in the third quarter of this year. Other sectors, such as the automotive industry, plan to hire more people.

Amid still-high inflation and the rising operational costs that derive from it, the survey found that around one in five employers in the public and non-profit sectors plan to fire workers this quarter. Similarly, one-fifth of all firms in the construction and industry sectors plan dismissals. In trade and services, 18 percent of companies anticipate layoffs.

For example, the Norwegian conglomerate Orkla, which owns the Vitana, Hamé, Znojmia, and Otma brands in the Czech Republic, is planning to close the Pika Bzenec and Agrimex Vestec manufacturing plants.

According to the latest information from the Labor Office, the Trelleborg Wheel Systems company, which manufactures motorcycle tires, is also closing down in Zlín. At the end of June, it dismissed over 100 employees. The furniture company TON from Bystřice pod Hostýnem in the Zlín Region also announced the dismissal of about 100 people in the spring.

"Every fifth employer in industry and construction says that they will make layoffs, but on the other hand, another one-third plan to recruit," says Jiří Halbrštát, recruitment and marketing manager of ManpowerGroup, in iDnes.

Hiring and firing plans are heterogeneous among different sectors, though. For example, employers in the automotive industry are planning to recruit more people than they lay off, according to ManpowerGroup. 

The biggest hiring plans come from companies operating in finance, insurance, and real estate, where more than half of the respondents intend to increase the net number of employees this quarter. In the field of energy and public services, 45 percent of companies expect a rise in the number of employees.

“If companies resort to layoffs, it does not always have to be connected to bad economic development, but also, for example, to the automation and digitalization of companies," says Dagmar Kužvartová, director of the Employers' Section of the Czech Industry and Transport Association. For example, the Czech Labor Ministry reported just last week that by 2030 over 90 percent of jobs will require digital skills nationwide.

A separate survey from ManpowerGroup found that, at the start of this year, 22 percent of employers planned to hire new employees, whereas 24 percent expected to reduce their number.

Rising costs are predominantly behind plans to lay off workers, but sectors that are economically on a good trajectory (such as the automotive industry and IT) are likely to increase their employee numbers this quarter.