Job Cuts Ripple Across Corporate Europe, Despite Resilient Economy
Summary
- Despite threat of recession from the Ukraine war, large-scale layoffs in the continent have remained mostly limited
BT Group, one of the biggest telecom companies in the U.K., said it was reducing its workforce by as much as 42%, or about 55,000 workers, by the end of the decade, capping several months of corporate job cutting across Europe.
The planned job reductions at BT come days after rival Vodafone Group, also based in Britain, said it would shed around 11,000 jobs over the next three years. The week of large layoff announcements in the U.K. follows months of high-profile white-collar staff reductions in the U.S.
In contrast, European businesses haven’t by and large been resorting to similar, large-scale companywide reductions. Unemployment rates across the continent have been trending at all-time lows for months.
Economists had expected a much darker economic picture across Europe as recently as earlier this year. Despite soaring energy prices triggered by the war in Ukraine, however, much of the continent has so far avoided what had seemed like an inevitable recession.
Labor laws across the region—particularly in continental Europe—often provide a buffer against large-scale cuts even when economic conditions turn dire. Still, large companies, including some of Europe’s biggest corporate players, have been shedding staff in measured layoffs alongside their American peers.
BT’s cuts stand out for their size. The company said Thursday it would shed both direct employees and contract workers from a current workforce of some 130,000, as it restructures and further digitalizes its operations. Vodafone said earlier this week that its cuts are part of a plan by its new chief executive to turn around the group’s performance.
A flurry of smaller-scale corporate downsizings in Europe took place earlier in the year, when the economy looked less resilient. German business-software company SAP announced it was shedding 3,000 jobs in January after recording a steep profit drop in 2022.
Ericsson, the Swedish telecom-gear maker, said in February that it was shedding about 8,500 workers worldwide. It cited cost cutting as orders for its 5G gear slowed in the U.S. and other markets.
The same month, Ford Motor said it was planning to slash 3,800 jobs in Europe over the next three years to lower costs and boost profit as it continues to shift toward electric vehicles.
Other companies, including Volvo, the truck and bus maker, Volvo Cars, which makes passenger vehicles, Jeep maker Stellantis and U.K. grocery chain J Sainsbury have all announced smaller cuts to staff. German industrial company BASF and Finnish elevator maker Kone also pared staff modestly earlier this year.
Royal Philips, the Dutch medical equipment maker, said in January that it plans to cut 6,000 jobs by the middle of the decade, including 3,000 this year, as part of a reorganization aimed at improving its performance. The cuts were in addition to the 4,000 roles the company said it would eliminate in October. Philips, which sells products including MRI scanners and ultrasound machines, has been hit by supply-chain issues, lower sales in China and the fallout from the Russia-Ukraine war.
Write to Mauro Orru at mauro.orru@wsj.com
