Approximately two-thirds of entrepreneurs anticipate enacting job cuts, according to a survey of Romanian business leaders.
In an internal survey conducted among 417 Romanian entrepreneurs, it was revealed that a staggering 62% anticipate the necessity of enacting layoffs, with a third expecting no change in employee numbers. This impending workforce reduction is reportedly linked to the forthcoming Romanian presidential election and the potential influence of the candidate on the nation's European Union (EU) affiliation.
The entrepreneurial community is concerned that a president inclined to steer Romania away from the EU could lead to financial instability and rock the business world. Here's a breakdown of the anticipated layoffs:
- 12% foresee having to let go of under 10% of their staff.
- 41% envision cutting between 10% and 20% of their workforce.
- 28% anticipate reducing staff by 20-30%.
- 10% predict laying off 30-40% of employees.
- A grim 9% fear trimming their workforce by over 40%.
Meanwhile, only 5% believe they will be compelled to hire new personnel.
Romanian Business Leaders warn of the consequences of such a political climate, stating, "An unstable political environment filled with anti-investment discourse and populist economic rhetoric will have direct and serious consequences on the real economy. The organization emphasizes that decisions diverting Romania from its European and Western commitments may force many entrepreneurs to resort to layoffs to protect business sustainability."
Notably, most of the entrepreneurs considering layoffs operate microenterprises and small companies, with 72% falling under this category. Additionally, 69% expect a considerable decrease in their employees' purchasing power, while 18% foresee a slight decline.
The Romanian Business Leaders Foundation stands as an impartial and non-political organization.
When considering the implications of the election results, financial experts posit that a victory for far-right candidate George Simion could lead to severe currency depreciation, blocked EU funds, unsustainable interest rates, tax hikes, and deterioration in the investment climate. This would, in turn, increase layoffs and threaten the sustainability of businesses.
On the other hand, a victory for more moderate candidate Nicușor Dan could usher in fiscal consolidation, closer EU alignment, increased investor confidence, and a gradual economic growth recovery. Such factors would support business sustainability and potentially alleviate layoff pressures.
Consequently, the outcome of the Romanian presidential election holds significant implications for entrepreneurs, with the far-right nationalist option signaling economic uncertainty and business hardship, while the moderate candidate represents continuity and greater economic stability.
Sources:[1] Euroactiva, 2022[2] News.ro, 2022[3] Reuters, 2022
- The political climate, influenced by the upcoming Romanian presidential election, is causing concern within the business community, as they foresee potential economic instability and increased layoffs in various industries, such as finance and general news.
- As the election results could significantly impact Romania's European Union affiliation, politicians must be aware that their decisions might have direct consequences on the business world, particularly small and microenterprises, possibly leading to a decrease in employees' purchasing power and an increase in layoffs.
