European firms continue to implement layoffs due to sluggish financial outlook
Date
10/20/2024 2:16:42 AM
(MENAFN) European companies have continued to implement layoffs throughout the second half of 2024, driven by a stagnant economic outlook. The region is grappling with the lingering effects of the Russia-Ukraine war, structural challenges in key economies like Germany, and weakened consumer demand caused by tight monetary policies. As businesses face rising costs and shrinking sales, many are cutting labor costs to adapt to the difficult economic environment.
Inflation in Europe remains higher than pre-pandemic levels, which has eroded household purchasing power and, in turn, dampened consumer spending. To combat inflationary pressures, central banks have raised interest rates, leading to higher borrowing costs for companies. This has further strained corporate finances, with many businesses seeing reduced profits, contributing to widespread layoffs across the continent.
The layoffs span across a wide range of sectors but are particularly concentrated in industries such as automotive, engineering, banking, technology, oil, and pharmaceuticals. Companies like Airbus have recently announced significant job cuts, with the France-based aerospace firm planning to reduce its workforce by up to 2,500 positions in its defense and space division by 2026. Other major companies have made similar moves, including Swedish battery maker Northvolt, which plans to lay off 1,600 employees to improve production capacity, and German railroad operator Deutsche Bahn, which will cut 30,000 jobs, about 9 percent of its workforce.
In addition, several tech firms are also downsizing. German chipmaker Infineon will reduce its workforce by 1,400 and relocate some roles to lower-cost regions, while Nokia is expected to lay off 350 employees in Europe and 2,000 in China. In the banking sector, Norwegian financial services firm DNB plans to eliminate 500 positions, and Italy's UniCredit has reached an agreement to cut 1,000 jobs while creating 500 new roles. On the consumer goods front, Dyson is cutting 1,000 jobs in the UK as part of its global restructuring, and Unilever plans to reduce its European office staff by a third by the end of next year.
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