Survey: a quarter of Czech companies have cut staff due to coronavirus

Low earners, people over 50 years old, and people who recently graduated were most at risk for unemployment

Samantha Tatro

Written by Samantha Tatro Published on 03.06.2020 15:36:13 (updated on 03.06.2020) Reading time: 2 minutes

A quarter of Czech companies laid off some of their employees during the coronavirus pandemic, according to a survey, while other companies reduced the salaries and benefits of their employees.

The survey, conducted by consulting company Randstad, lays out the bleak findings about the Czech economy, predicting that up to 10 percent of the population could lose their job by the summer or fall.

When coronavirus measures first went into effect in March, the government asked companies not to lay off workers. However, Randstad’s report, which samples 650 companies, found that companies started to take measures in April and continued in May. The CEO of Randstad, Jacek Kowalak, told FAEI that the measures varied by company and sector.

Some businesses, like hotels and restaurants, had to stop operations and resume months later under strict regulations; meanwhile, sectors like IT and business were able to continue on as normal.

Many Czech citizens’ and residents’ jobs were affected by the Coronavirus pandemic, the survey found. Nearly 27 percent of the surveyed companies made their employees redundant, more than 22 percent laid off their employees, and another 20 percent of companies reduced their employees’ bonuses and benefits. Automotive and trade and service sectors accounted for the largest redundancies, according to Kowalak.

Ten percent of those companies surveyed reduced their employees’ salaries, though the amount of wages cut varied dramatically. The survey found that a third of employees saw a maximum five percent cut in their wages. However, another third of the employees affected saw their wages fall 30 percent. A small percentage of companies cut benefits like meal vouchers, insurance, and subsidized food as well.

Instead of laying off their employees, some companies opted to reduce their employees’ hours or their workload in an effort to keep their employees on board.

“It can, therefore, be expected that the measures will continue in many companies. However, the question is what will happen after the end of government support. There will probably be another wave of redundancies,” Kowalak told FAEI.

In a worst-case scenario, the Randstad survey found, people earning a low income (20,000 CZK), people over 50 years old with families and people who recently graduated were most at risk for unemployment. People working in the hospitality, service, and tourism industries are most at risk as the country recovers from coronavirus, the survey found.

Amid the bleak news, some hope:  a quarter of the surveyed companies did not introduce any measures at all as a result of Coronavirus. The biggest winners in this scenario included e-commerce, IT, and business services. These fields oftentimes did not have to reduce employees or lay anyone off; instead, many of these sectors gained new business and grew their businesses.

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