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Considerably more layoffs in store this autumn, economist says

Meanwhile, the employment minister said it's vital to help laid-off workers search for new work as quickly as possible.

Työministeri Tuula Haatainen (sd.) ja Suomen Yrittäjien pääekonomisti Mika Kuismanen
Employment minister Tuula Haatainen (SDP) and chief economist at the Federation of Finnish Enterprises, Mika Kuismanen, who appeared on Yle TV's A-studio on Tuesday evening.

The coronavirus crisis has continued to wreak havoc on an increasing number of Finnish companies, causing a rise in layoffs and furloughs. In the past day alone, national airline Finnair announced plans to cut 1,000 jobs and shipping firm Viking Line said 200 jobs were on the chopping block.

Further redundancies are in store in the near future, according to chief economist at the Federation of Finnish Enterprises, Mika Kuismanen.

"The autumn will certainly bring about a considerable number of redundancies," he told Yle's TV discussion programme A-studio on Tuesday evening.

He noted that layoffs at large companies always have broader implications, as they cause subsequent declines in the use of subcontractors and related business operations - which prompts a knock-on effect on the entire economy.

"Yes, these are serious issues that affect the labour market and surrounding issues," Kuismanen said.

New jobs for laid-off workers

Meanwhile, also a guest on the programme, employment minister Tuula Haatainen (SDP) said it is important for those who do lose their jobs to find new work soon after they get laid off, saying that they should be in contact with the TE-office employment agencies even before their termination becomes official.

"The employees should chart out their skill sets, find out what other skills should be supplemented and then work together [with the employment office] to look for a new job so that they do not fall into unemployment," Haatainen said.

Economist Kuismanen noted that while it was excellent that authorities had responded quickly to job cut announcements, he said plans were still lacking.

"This is a bit of a band-aid approach. When there are a lot of [layoffs], agencies and offices cannot help everyone," he said, noting that structural factors were far more important to help people get jobs.

He said when people become unemployed there should be incentives for them to transition to actively search for jobs.

Goals and ideas

Haatainen said that the newly-jobless should be offered training and support, saying that the government is more interested in making investments in stimulus, rather than budget cuts.

"Now that unemployment has risen and the labour market has slowed, it is by no means the time to cut social support safety nets," she said.

Finland is lagging behind the rest of the Nordic countries in terms of employment services, the employment minister noted, saying that she would like to see more people with mild disabilities in the workforce, like in Sweden. Haatainen also said it was especially important to invest in education and young people.

On the other hand, Kuismanen said investments should be made in people who are in their prime working years. He said the best way to reduce jobless figures would be stagger and shorten earnings-related unemployment insurance, re-evaluate the pension system and, for example, broaden apprenticeship programmes for young people.

The Federation of Finnish Enterprises represents more than 115,000 SMEs and their owners.

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