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Many Swedish firms plan to reduce workforce as external and internal economic situation remain gloomy

Friday, 18 January 2013
Close to one in four companies have put staff reductions at the top of the list of actions to reduce costs in 2013, a report from the Swedish daily, Dagens Nyeheter show.
The paper writes that according to a new study from the Royal Swedish Academy of Engineering Sciences, (IVA) and other organisations, workforce in most companies will go down while at the same there is increasing pressure on the employees to keep their jobs.

The big job cuts that started in the autumn and which have been feared by both the working population and the country's employment authority will not subside. On the contrary, most companies management state the need to cut even more in costs in 2013 and especially on the personnel side. The reason is that companies performances continue to look bleak on developments in Europe and Sweden. Nearly 60 percent of Swedish companies surveyed expect the economy to get worse this year.

According to a new study presented today that would explain how Swedish companies are trying to prepare their saving packages, large new savings package come as the economies of the EU continues to bleed and Sweden which relies on the EU for sales  are struggling to see how the conjunctural situation will change within the nearest future.

The survey is based on a cross section of Swedish industry. 131 CEOs come from  many companies - more than half consisted of energy, raw material and manufacturing industries, trade and transport - have responded to a survey supplemented by interviews.

The study has been carried out by strategy and consulting firm Axholmen in cooperation with IVA and Linköping University and this is the third year they have been testing the Swedish economy of such vices.

A broad spectrum of companies - that is in terms of size, half with a turnover under a billion Swedish Krona and half with over a billion Swedish Krona, of which 15 percent had a turnover of five billion were involved in the testing.

More than one in four companies is planning to cut back on staffing to meet the requirements of profitability. It is a more than 30-percent increase compared to a similar survey done 2012.

According to the Swedish Employment Service, 71,000 jobs were eliminated during the crisis year of 2012. According to Jacob Holm, CEO of consulting firm Axholmen which was part of the survey team, high number will be expected this year.

Despite the continued gloomy external outlook the study show, that almost all managers have an almost incurable optimism to succeed in maintaining the profitability of their companies. It is important that companies retain their innovative capabilities while trying to go for safe bets, some authorities are contending.
By Team

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