CORONAVIRUS

Spanish firms react to coronavirus with a wave of temporary layoffs, affecting more than 100,000 jobs

Seat, Burger King and Iberia are among the companies that have so far filed what is known as an ‘ERTE,’ allowing them to suspend jobs “until normality is reestablished”

A file photo of the Seat production line at the company’s factory in Martorell, Spain.
A file photo of the Seat production line at the company’s factory in Martorell, Spain.Albert Garcia / EL PAÍS

Seat. Burger King. Iberostar. Volkswagen. Cortefiel. A trickle of large companies in Spain has already announced that they will be implementing “ERTEs,” a temporary layoff of workers prompted by the ongoing coronavirus crisis. At least 100,000 people are facing losing their jobs.

The announcements come in the wake of an ERTE implemented on Friday by former Spanish flag-carrier Iberia, which will affect 90% of its 16,000 employees. Other airlines such as Norwegian have also put similar measures into place, which will affect 90% of its workforce, around 7,300 employees in total.

This scenario of temporary layoffs is likely to be repeated over the coming days

The global Covid-19 pandemic is causing huge damage to the Spanish job market, and this scenario of temporary layoffs is likely to be repeated over the coming days.

One of the biggest ERTEs so far was presented by automobile manufacturer Seat on Monday. It will affect 14,812 people and has been justified by the company on the basis of “force majeure,” while the current state of alarm and total lockdown remains in place in Spain. While the measure includes the entire workforce of the Spanish manufacturer, which is owned by the Volkswagen Group, the company is planning to limit its implementation to production-line workers who cannot do their jobs from home, something that will affect around 10,000 people.

Union sources said that the suspension of employment at Seat could last as long as five weeks, once the factories have shut down their activity. The firm has agreed to complement unemployment payments with as much as 80% of workers’ usual salaries.

Burger King Spain has presented an ERTE that will affect 14,000 employees – 11,000 of its own, and 3,000 from franchise restaurants

The biggest ERTE in Spain until now is that of the Alsea group, which owns restaurant and café brands in Spain such as Vips, Starbucks, Cañas y Tapas, and Foster’s Hollywood, and will affect 22,000 employees.

Burger King Spain, meanwhile, has presented an ERTE that will affect 14,000 employees – 11,000 of its own, and 3,000 from franchise restaurants. The fast-food chain opted to close all of its restaurants on Friday, and ruled out continuing with home deliveries, in accordance with the recommendations of health authorities.

The suspension of jobs will last “until normality is reestablished,” said the chain, which defended the measure “after evaluating the best alternatives for maintaining jobs as soon as this situation is over and guaranteeing the stability of the company.”

The Spanish Labor Ministry has said that it is working to inject resources into the labor market

In the tourism sector, the hotel chain Iberostar announced it would be closing all of its hotels in Spain, “a measure that could soon be extended to other countries.” The company added that it will temporarily suspend “work activity on a global scale.” Iberostar counts on 34,000 employees in 120 hotels, across 19 countries.

The Spanish Labor Ministry has said that it is working to inject resources into the labor market, so that activity is only affected for a few weeks and soon returns to normality.

As well as ERTEs in large firms, small businesses are also suspending jobs. In the Valencia region alone on Monday, 137 ERTEs were filed, affecting 4,683 workers. In Catalonia, meanwhile, there were 70, which will affect 3,819 workers.

English version by Simon Hunter.

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