Tuesday, 13 January 2009

"Temporary" Lay-offs Sky Rocketting

"Over 10,000 employees have received notice or a warning of possible lay-offs since the turn of the year, says the blue collar union federation SAK. The rate of lay-off or redundancy notices has accelerated especially during the past week.

On Tuesday, engineering consultancy firm Pöyry, Sunila Pulp Mill and paper producer Myllykoski announced they were initiating consultative talks on possible staff cuts.

They join a long list of firms including M-Real, Hankkija, Onninen, Sandvik and Cargotec.

The SAK union federation says the number of actual job losses has also clearly increased. Some 5,000 employees lost their jobs in the final quarter of 2008. This is four times more than in the same period a year ago"

Temporary layoff is a way to improve company balance sheet as banks have stopped short of giving easy financing. In 2008, the growth for short term financing have risen in the magnitude of 20% year on year, clear unsustainable, showing that company had already difficulty raising money...

I'm just wondering who will pay those temporary layoffs, is it the state? in that sense, is it right to say that the tax payer money is being used while at the same time the company executive and some non-temporary lay-offs employees (directors and "snow" white collars) will still enjoy bonuses, stock options and very elevated salaries.

Is that right? At the end we have a form a socialism coupled with "free-risk" capitalism. So no wonder you have seen company rushing for executing (in process term) temporary layoffs. I wonder if this system is flawed.

On the other hand, the other alternative is quite ugly. would it be good for the society to have a sharp rise in unemployment? maybe not.

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