Several companies in Finland on wednesday announced plans to temporarily lay-off many of their workers, as the country continued to make efforts to curb the coronavirus pandemic.
In the early evening on Wednesday, trade unions were deliberating on a joint proposal with employers organisations to ease the restrictions on furloughs in the current legislation.
At present the negotiation process takes five weeks, during which salaries must be paid. Given the cashflow crisis many firms are now facing, unions and employers want to make this process quicker.
Workers temporarily laid off by their employer can claim income-linked benefits from their unemployment fund.
Struggling Finnish retailer Stockmann issued a profits warning on Wednesday, stating that profits will decline significantly due to the outbreak. The firm said the earnings forecast it issued last month was no longer correct, saying that it would issue an updated forecast once circumstances are clearer.
Citing the coronavirus outbreak on Tuesday, Stockmann announced plans to temporarily lay off staff for 90 days, a move that may affect around 1,400 people.
Valmet Automotive EV Power, which runs a battery factory in Salo also announced temporary work furlough plans on Wednesday, affecting 200 employees. The company said the spread of coronavirus had led to a rapid decline in demand for batteries and that there was also a shortage of essential components.
Production at the battery plant is expected to resume by the summer, according to Valmet.
Earlier on Wednesday, the retail cooperative S-Group said that more than 80 of its restaurants in the Helsinki area would temporarily close starting on Monday 23 March, because of the outbreak. Around 800 of its employees will be sent to work at around 200 of the cooperative’s grocery stores in the region.
Yle News’ coronavirus blog reported that Finnish tyre manufacturer Nokian Tyres was about to start negotiations to temporarily lay off staff in Finland for up to 90 days - plans that could affect more than 1,600 of the firm's employees.
Bankruptcies up in Jan-Feb
News service STT reported Wednesday that the number of bankruptcies in Finland increased by 20.8 percent during January-February, compared to the same period last year, citing data from Statistics Finland.
The number-crunching agency said that 552 bankruptcies were filed in Finland during that time, an increase of 95 compared to last year.
Additionally, the number of employees who were employed in the firms that filed for bankruptcy totalled 2,313, nearly 11 percent more than the same time in 2019.
Bankruptcies increased across the board in all sectors apart from trade, transportation and logistics.
Many Finnish companies fear that coronavirus has significantly increased the likelihood of bankruptcy, according to the Finland Chamber of Commerce, which said that it wants to see greater government action to bail out the corporate sector.
SMEs particularly hard-hit
Yle’s Finnish news service reported on Wednesday that the country’s small businesses were facing particular difficulties because of the pandemic.
Mari Laaksonen, chair of the Regional Organisation of Enterprises in Helsinki, told Yle that independent entrepreneurs often do not have a safety net of readily available funds to support their businesses during difficult times.
She said that single-person businesses made up about 80 percent of entrepreneurs in the city, adding that the most damage to small businesses could be seen in the events and restaurant sectors.