Employers’ association survey shows reduction in expected redundancies over next three months

The number of companies which expect to lay off workers in the coming months has decreased compared to the situation during the height of the coronavirus pandemic, an employers’ association survey shows.

A study conducted by the Malta Employers Association on COVID19 business and employment projections, published yesterday, shows that 20% of the 253 businesses surveyed expected an increase in redundancies in the next three months.

A similar survey conducted by the MEA in April, in the middle of the COVID-19 crisis, indicated that 31% of businesses believed they might need to lay-off workers.

This latest MEA survey was conducted between 27 May to 3 June, before the government’s unveiling this week of its €900 million economic recovery plan.

The survey shows that 34% of respondents did not expect any increased redundancies in the next three months, while 46% were still undecided.

In terms of redundancies which have already taken place, the results show that while only 9% of businesses had laid off workers according to the April study, the most recent survey indicates that 17% of enterprises had let go of some workers.

Amongst those companies which did make some redundancies, the vast majority – 88% – let go of only up to 25% of their workers, while only 2% laid off up to 75%.

Most companies which responded to the survey, however, did not give high scores in terms of the effectiveness of the government schemes when it came to avoiding lay-offs.

Although the negative effects of the pandemic on redundancies was relatively contained, 87% of survey respondents reported a loss of business due to COVID-19. Only 3% said their business increased, while 10% reported no effect.

Of the respondents that reported a loss of business, 33% reported a loss of over 75%. Fifty-two percent of such businesses operate in the hospitality industry.

Most respondents – 54% – said they expected their business activity to eventually recover, while 32% said they didn’t know if it would, and 13% said it would not.

Amongst those expecting a recovery, the largest portion – 27% – said they thought it would take over 18 months, while 26% said things could take between a year to a year and a half to get back to normal.