Bad news has fallen: a quarter of Hungarian companies plan layoffs

A quarter of Hungarian companies are planning layoffs by the end of the year, according to a survey by ManpowerGroup.

While half of companies are planning no change in the workforce, only 20% are planning new hires, so layoffs could top the latter for the first time since the pandemic hit, the survey found.

Layoffs are mainly expected in the capital and in western Hungary. Employment could increase in manufacturing industry while remaining stagnant in banking, insurance and the real estate sector. A decline is expected in the production of raw materials, IT, technology, telecommunications, communication and media.

Additionally, 39% of hotels and restaurants are planning discounts, ManpowerGroup said.

What is expected depends on business size, with smaller businesses less likely to lay off employees this year, they said.

Based on this data, ManpowerGroup believes the labor market has entered a new phase, with job seekers facing tougher times as labor shortages ease. This development is explained by a surge in the prices of raw materials and energy and an expected drop in solvent demand, which forces employers to adapt quickly.

ManpowerGroup forecasts are based on feedback from a representative sample of 500 employers. The quarterly survey covered 41 countries, according to the release.