Big companies plan massive layoffs

Photo: European Commission

The Czech jobless rate is getting close to an all time high and experts predict the rise will continue in the future. Several large Czech companies have announced massive layoffs for January next year.

Photo: European Commission
Big companies in the Czech Republic plan to cut about 35,000 jobs by the end of January, which will further aggravate the worsening unemployment situation. Due to the pending staff cuts, the Labour and Social Affairs Ministry believes the country's unemployment rate could climb to unprecedented highs. Economic analyst Vladimir Pikora confirms this is likely:

"People are afraid of unemployment less than in the past. We think that this is wrong, as we expect the unemployment rate to reach its record-high level of almost eleven percent in January 2004."

In five months so far this year, the jobless rate reached or exceeded a record 10 percent. In some regions, the unemployment rate exceeds 20 percent.

The situation will worsen at the beginning of next year when the dominant telecommunications operator Czech Telecom and national power utility CEZ plan to slash a combined 2,500 jobs, while other large layoffs are scheduled at car maker Skoda Auto, and aircraft manufacturers Aero Vodochody and Letecke zavody Kunovice. The Czech leading gun producer Ceska zbrojovka is also cutting staff.

The government has been looking for ways to fight unemployment, including a plan to create jobs with public works projects.

Experts say the biggest problem is a growing number of long-term unemployed and school leavers who sign up at labour offices immediately after the final exams and have no chance to obtain any practical skills and develop necessary working morale.