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Guest workers in danger? Hungarian companies plan to dismiss many employees in 2025
K&H revealed its annual large company growth index on Tuesday. They found that 10% of the large Hungarian companies above HUF 2 billion income plan to reduce employee numbers this year. That rate increases to 15% in case of large companies above HUD 10 billion income.
Hungarian companies plan large-scale dismissals
According to 444.hu, Hungarian companies’ economic and expansion expectations are continuously worsening, which is why so many of them plan reductions concerning their employee numbers this year. Companies developed a negative attitude towards economic prospects in 2022 because of the Russian invasion of Ukraine and in 2020, the outbreak of the COVID pandemic.
Tibor Bodor, the leader of K&H’s enterprise division, said in the report that the reasons behind the Hungarian companies’ negative attitude are the increasing inflation and the turbulent changes in global politics. As a result, they do not concentrate on expansions but on maintaining the workforce. However, not every company can do so. Consequently, some companies will have to dismiss the workforce.
Hungary employment rate sixth-highest in EU
Hungary’s employment rate, at 81pc, is the sixth-highest in the European Union, the National Economy Ministry said in an analysis on Wednesday. Hungary’s seasonally-adjusted employment rate for people between 20 and 64 stood at 84.8pc for men and 77.1pc for women in the fourth quarter, the ministry said.
The employment rate was well over the 75.9pc EU average, it added. The number of employed people in Hungary has reached 4.7 million, while the number of registered job seekers has dropped to a new low. Hungary’s jobless rate, at 4.4pc, is among the lowest in Europe and well under the 5.7pc EU average.
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It’s revealing as to the levels of confidence in companies willing to let employees go in a tight labour market, knowing they could be extremely difficult to recruit again in the future if nothing changes. I believe most companies will have hung onto underutilised colleagues for as long as possible, precisely with a view to avoiding recruitment difficulties in the future, but the economic climate is such that some employees unavoidably need to be dispensed with. But for tight labour market conditions, levels of unemployment in Hungary would be higher but the chickens are coming home to roost.