Economics in a picture
The largest reductions in staff effectively working due to COVID-19 are associated with the simplified layoff
Statistics Portugal and Banco de Portugal launched, in early April, the Fast and Exceptional Enterprise Survey, which aims to assess the impact of the COVID-19 pandemic on companies in Portugal. The results for the week from the 6th to the 10th of April show that a significant share of companies reported a reduction in staff effectively working, with 30% reporting a decline larger than 75%. These significant reductions are associated with simplified layoff plans. In contrast, companies that reported less pronounced reductions in workforce cite absenteeism related to the state of emergency restrictons, due to illness or family support, as the main reason. It should be noted that a very small percentage of companies refer the dismissal of staff with open-ended contracts or the non-renewal of fixed-term contracts as the main explanations for the reduction of staff effectively working.
The pandemic crisis has resulted in a substantial drop in the turnover of Portuguese companies, which are trying to preserve their liquidity by containing costs, including those related to working personnel. In this context, the simplified layoff measure mitigates the risks of company closures and dismissals, allowing for shared costs between workers, companies and social security.
For more details see the Fast and Exceptional Enterprise Survey – COVID-19, week from 6 to 10 of April 2020, available (in Portuguese only) on the websites of Banco de Portugal and Statistics Portugal.
Prepared by Ana Sequeira and Cristina Manteu. The analysis, opinions and results expressed herein are those of the authors and do not necessarily coincide with those of Banco de Portugal or the Eurosystem.
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