Announced job creation in large-scale restructuring cases balanced announced job losses in the first six months of 2014 for the first time since before the start of the global economic crisis in 2008. The convergence reflects improving labour market conditions and is mainly down to a steady decline in job destruction since the second half of 2012.
This information comes from Eurofound’s European Restructuring Monitor (ERM), which records restructurings involving the loss or creation of 100-plus jobs announced in the media across Europe.
Its annual report for 2014, just published, describes developments from the first quarter of 2013 to the second quarter of 2014 inclusive. Over this total period, announced job loss outstripped announced job gain: 481,000 jobs were lost while 298,000 new jobs were created.
Manufacturing contracting
Manufacturing accounts for most announced job losses and job gains in the database, partly because manufacturing firms tend to be big and so are more likely to meet the threshold for inclusion. The share of manufacturing in the database has tended to decrease since its launch in 2002, in particular as regards announced job creation, which demonstrates its diminishing share of overall employment. Around one in six European jobs is now in manufacturing compared with one in four in 1980.
EU-LFS data show that within manufacturing, job losses have been most severe (losing more than 15% of employment) in basic, low-tech subsectors such as basic metals, textiles, clothing and leather, and wood, paper and printing. Machinery, food and beverages, and pharmaceuticals suffered more modest employment declines (losing less than 5%).
Retail losses
The retail sector makes up an increasing proportion of announced job loss. Retail has been undergoing intensive restructuring activity since 2008 as consumption patterns shift away from established supermarket chains to mass market discount retailers. A combination of market forces, narrow margins and cross-border competition has seen the collapse of some major established retailers such as Woolworths, Arcandor and Dayli and the rapid rise of groups such as Aldi, Lidl and Ikea. The overall outcome for employment has been a net loss of some one million retail jobs (just over 3% of sector employment) since 2008.
Public administration is another sector where large job losses have been announced in the past few years, occurring mainly in 2011–2012, coinciding with austerity-driven cutbacks in many Member States. There was also a significant increase in the share of job losses announced in financial services in 2013–2014, which could be a delayed reaction to the troubles experienced by the sector during the global financial crisis.
Employment growth has occurred mainly in the service sectors, both in high-skilled services and also in predominantly low-skilled residential care activities.
Part-time employment
A striking change in the employment landscape since the crisis has been a fall in full-time permanent jobs, even in the public sector; new jobs are increasingly likely to be part time. Part-time employment in the EU has increased by more than 10% since the crisis began, in the same period as full-time employment decreased by 5%.
This development has negative implications for job quality, as part-time work generally offers lower pay and fewer entitlements. It also implies that real labour inputs (in full-time equivalent terms) have declined by even more than the overall figure for net job loss in the EU since 2008 – six million – suggests.
The ERM annual report 2014 also includes an analysis of flows out of employment over a decade, to map why people left employment, and explores the rapid transformation of the public sector in Europe since 2008.
Factsheets on individual restructuring events in the ERM are also available.