Prague - Slezan, Alfatex, Moda, Pleas, Bohemia Crystalex Trading, Automotive Lighting and Bosch are part of a long list of companies that have made redundant thousands of employees in the past weeks.
The reasons why these firms, most from the textile and glass sectors, decided to reduce staff are often the same. They include the global financial crisis, competition from cheap goods produced in Asia, and the strong Czech crown that is hurting exporters while making imports cheaper.
September unemployment rate published by the Labour and Social Affairs Ministry remained flat at 5.3 percent, disappointing analysts who predicted a further decrease. The rate is expected to grow moderately this year and spike in 2009.
"While this year we expect the average unemployment rate to be at 5.4 percent, for next year we forecast an average of 6.2 percent. This means the number of jobless people will increase by 40-50.000," said Patria analyst David Marek.
Vacancies still abundant, layoffs hit locally
Yet, some experts say that the recent redundancies will not significantly increase the overall unemployment, as there is still abundance of vacancies.
"From the point of view of the labour market, the Czech economy is going through its best period in the last 10-15 years. At the end of August there were roughly 151,000 vacancies," said Petr Sklenář from Atlantik FT. He added that companies are still having a hard time finding qualified people for those empty jobs.
The first negative impacts of the recent layoffs are showing on a local level, above all in Světlá nad Sázavou, near Havlíčkův Brod, where 1,300 people are likely to lose jobs after glass manufacturer Sklo Bohemia announced it was shutting down production.
"The labour market in the Havlíčkův Brod area is not able to absorb that much free workforce immediately, as there are only about 800 vacancies here," said Martin Kouřil from the local labour authority.
Czechs rarely move for better work
On Thursday, the redundant employees of Sklo Bohemia get an opportunity to find new work at a meeting, organised by the labour authority, with employers from all around the country. Kouřil said he had invited employers who could offer both work and accommodation; these include companies from the Ostrava area and west Bohemia.
The question remains how many of the redundant workers will be ready to work far from their homes. "In the Czech Republic, the mobility of workforce is still very low, in terms of switching professions as well as changing one's geographic location," said Sklenář.
