Layoffs and bankruptcies cannot be avoided: Dutch government

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Stock photo of the Netherlands flag, cash in euros, and a calculatorphoto: Zerbor / DepositPhotos

In spite of a 10-billion euro rescue package designed to ensure that Dutch businesses continue to pay their employees, people should be prepared for impending bankruptcies and layoffs in the weeks ahead, social affairs and employment minister Wouter Koolmees said. “People will lose their jobs and companies will go bankrupt,” Koolmees admitted to local news service AD.

“I shouldn't be naive about that," he said. “Of course this crisis also has structural effects,” the minister explained, addressing concerns around the possibility of mass layoffs. “The travel industry is receiving a major blow, as are aviation and catering.”

However, he continued, there are sectors “where there are major differences: supermarkets and hardware stores generate a lot of turnover, while the rest of the retail sector does not.”

Koolmees’s comments come mere days after the government announced its plan to cover up to 90 percent of wage reductions for companies which lose at least 20 percent of turnover in the span of three months as a result the coronavirus. The measures, announced March 31, apply to earnings of up to 9,538 euros per employee per month.

Despite this, Koolmees acknowledged that many businesses will still seek to lay off employees instead of applying for the benefit. “There will certainly be companies that expect the consequences of the crisis to last longer and act accordingly by firing staff,” he explained. The rescue package is also, “intended to continue paying people with a temporary contract or on-call workers,” he pointed out.

“In a crisis you often see that these people are the first to be cut,” Koolmees noted. It was the flexible nature of their employment that made them most likely to take a hit, of which Koolmees said, “I am most concerned about them.”

Indeed, flexible workers and independent contractors are among the most concerned in the Netherlands for their personal financial situations. Research published Saturday showed that between 60 and 70 percent of people working on a flexible or per-diem contract are either concerned or very concerned about their finances in the wake of the ongoing health crisis.

The minister also expects that up to 150 thousand companies will file for the scheme and goes on to ask businesses for their understanding. “We are doing our very best,” he says. “The system is set up in such a way that large numbers of applications can be processed and paid at the same time.”