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Furloughs in Finland hit record high

The latest monthly figures top the record set during the recession of the early 1990s.

In the past, crises have hit industry first, but the coronavirus pandemic has impacted services such as tourism, hospitality, restaurants and cultural events. Image: Markku Ulander / Lehtikuva

More than 65,000 people were temporarily laid off from full-time employment in Finland during March, which is a new record monthly high.

The figures come from Akava, a confederation of professional and managerial unions.

The previous record dates back to the recession of the early 1990s, when just over 55,000 people were furloughed in February 1993.

During the financial crisis of 2008 and 2009, the highest recorded figure for one month was 40,000.

Akava's chief economist Pasi Sorjonen told Yle the number could be as high as 155,000 in April, as companies in many industries have either had to close their doors completely or have lost their customers due to the coronavirus pandemic.

Sorjonen added that the increase in temporary layoffs is not reflected in Statistics Finland's latest unemployment figures (siirryt toiseen palveluun) because those who have been temporarily laid off or who have been laid off for more than three months are considered unemployed. Akava has no current information on the duration of all layoffs.

Finland's system allows for employers to temporarily lay off employees after talks with unions, with employees receiving income-linked unemployment benefits during the furlough.

During the coronavirus crisis unions agreed to slash the minimum notice required for furloughs to just five days, in an effort to ease the burden on employers facing economic uncertainty.

"Permanent job losses"

Sorjonen told Yle it is difficult to predict how many people will be made redundant on a permanent basis and how many will return to work after the crisis, as a crisis of this magnitude will inevitably cause companies and jobs to be lost permanently.

"The main thing is how deep a recession the economy enters, and for how long," Sorjonen said, adding that he believes the economy is unlikely to recover within the next two years.

The biggest different between this crisis and previous ones, according to Sorjonen, is the huge effect it has had on service sectors such as tourism and hospitality, as well as leading to the closing of museums and the cancelling of music and cultural events.

"It is clear that this is not going to get back up to speed very quickly. There will be no immediate return to the previous level," Sorjonen said, and predicted that layoffs can turn into redundancies and unemployment will rise sharply if it is still not possible to arrange large music and cultural events later in the summer.