Record layoffs of 17,500 workers

High-tech sector fires 690 software engineers in December.

January 26, 2009 10:37
2 minute read.
Record layoffs of 17,500 workers

jobseekers 88 248. (photo credit: Ariel Jerozolimski)


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A record 17,500 people were fired in December as the recent wave of layoffs continued amid the global economic crisis, the National Employment Service reported on Sunday. The number of people looking for work rose 3 percent in December, in seasonally adjusted terms, from 199,800 to 205,800, compared with a rise of 2.2% in November. The biggest group of new job-seekers come from the hi-tech sector, said Yossi Parhi, director-general of the National Employment Service. "In the months of November and December 2008 the rise in the number of layoffs of software engineers was particularly prominent," Parhi said. "In December last year, 690 software engineers were laid off, compared with 318 in November and 100 on average in the preceding months." The raw figures, without the seasonal adjustment, show that last month 24,400 job-seekers were added, of whom 17,500 were laid-off workers. Employees with academic degrees were hardest hit by the wave of layoffs, as the number of university graduates seeking work jumped 8.3% in December compared with October. During the same period the number of job-seekers without an academic degree rose by 4.8%. In December the most jobs were lost in the Dan region, with 5,900 layoffs, followed by 4,000 in the North and 3,100 in the Center region. In response to the record number of layoffs, Histadrut Labor Federation chairman Ofer Eini called on the leaders of the three major parties, Kadima's Tzipi Livni, Labor's Ehud Barak and the Likud's Binyamin Netanyahu, to put their heads together with the leaders in the economy - from the Histadrut, employers, the Bank of Israel and the Finance Ministry - to formulate an emergency plan. "Party leaders came together amid the security crisis despite the election campaign, and in the same manner we expect that they will know to combine forces amid the economic crisis in spite of political disagreements," Eini said. Separately, a survey by the Association of Economic Organizations conducted over the past two months among a sample of 320 companies showed that 42% were forced to lay off workers because of the deepening credit crisis, while 54% cut executive salaries. Of the surveyed firms, 70% experienced difficulties in raising new or additional credit to finance current business operations and new investment. Construction companies are being hit hardest by the credit crunch, with 90% reporting great difficulties in getting credit lines to finance their business. Sixty-eight percent of the surveyed companies had difficulty securing their current credit framework. As a result, 35% of the companies said their owners have been forced to raise capital from their own pockets, 32% are having to resort to non-banking credit sources and 18% had to sell real assets to increase liquidity. In a letter sent along with the survey results to Prime Minister Ehud Olmert, Finance Minister Ronnie Bar-On and Bank of Israel Governor Stanley Fischer, the association warned that the credit crisis was threatening the ability of businesses to weather the global economic crisis and survive a looming recession.

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