One million jobs are at risk in the next two months if a 30-day state of emergency which was decreed to fight the spread of coronavirus is not lifted, a consulting company said.
More than 300,000 companies in Romania will be hit by the coronavirus pandemic and small companies are the most vulnerable, Frames predicted.
“Unfortunately, small and medium-sized businesses have laid off staff and stopped making payments to their partners which has accentuated the financial blockage,” said Adrian Nergrescu, the manager of Frames.
President Klaus Iohannis declared a 30-day state of emergency on March 16, shutting down restaurants, malls and sporting events. Even before that, tourism, event management, beauty salons, gaming rooms, and local shops and other companies with fewer than 20 staff were badly affected by the crisis with some forced to suspend their businesses as revenue dried up.
The consultancy company forecast was published after Labor Minister Violeta Alexandru said Friday that 200,000 work contracts had been suspended since the coronavirus outbreak, which she called “a serious situation.”
There were 5.62 million people with labor contracts in Romania at the end of February, according to the Work Office.
Government experts anticipate that between 300,000-400,000 labor contracts will be suspended during the pandemic which has wreaked economic havoc globally.
Frames said there were 400,000 people working in restaurants and the hotel industry who will either laid off or forced to take unpaid leave due to the massive downturn in business. Restaurants, clubs and bars have been ordered closed. Hotels have had to close their restaurants.
„Unfortunately, there is an even bigger knock-on effect, seeing that business networks means suppliers and a wide range of services are affected,” Frames said.
The study doesn’t take into account people who do not have work permits or legal forms of employment.
The government adopted an emergency ordinance on March 21 to pay unemployment benefits to employees of the hard hit private sector.
Under the measure, the government will cover unemployment costs for only 75% of the employees of a company which is in trouble due to the current situation.
