Mass job cuts on horizon

  • 2008-07-23
  • By TBT staff
VILNIUS - Almost four thousand Lithuanians are forecast to lose their jobs this year, according to Lithuania's Labor Exchange Office. This is an increase of 30 percent over 2007.
The Lithuanian labor force has been warned to brace en masse for an upcoming economic crisis that market research and analysis shows could lead to economic stagnation.
Prime People is the unemployment agency that conducted the research. A major finding of the research stated that the labor force must address a skills-shortage dilemma or face negative consequences for both employers and employees.

"The economic stagnation might lead to the reduction of business expansion. As a consequence, a huge number of people will become unemployed," Prime People director Ausra Deonaite explained.
The research's predictions about economic slowdown and loss of jobs have already become evident in Latvia and Estonia. Lithuania has yet to feel the effects, due to a delayed economic cycle.

Prime People's research found that about one-quarter of Lithuanian employers see cutting staff as the best way to avoid crisis. The research also showed that a lack of qualified labor is driving unemployment up.
Vilnius Zirmunai Labor Retraining Centre provides people with the skills to become qualified workers. However, the deputy head for the center, Birute Stelingiene, said they do not have many students at the moment.
"It is a pity because almost 90 percent of our students successfully integrate into the country's labor market after getting qualification with us," Stelingiene said.

The retraining centers are not full because the unemployed are reluctant to attend classes and learn new skills, said Stelingiene.
Inga Liuberte is the head of the Work Demand and Supply department in the Labor Exchange. She agrees with Prime People that the skills are critical. "Our biggest concern is the lack of qualified labor. Also, we see globalization as a contributing factor to increased competition amongst enterprisers. This, of course, gives a bigger chance of employees being sacked," she said.

Liuberte noted that 30 percent of unemployed people go to the Labor Exchange aiming to gain any sort of qualification. Unqualified and uneducated employees are the first to lose their jobs. The biggest numbers of discharged laborers are in the building, wood processing, furniture manufacture and food production markets.
Another reason for people losing their jobs is because employers haven't got enough clients and decrease the volume of work. Following a reduction in work, employees are shown the door.

This is not only a problem for employees. "It is also quite a shock for employers that instead of planned expansion of business they have to reduce expenditure," says Deonaite.
There are enough workers in Lithuania, but most of them are choosing to go to university instead of learning skills for vocational work.

A spokesman for Vilnius University's academic affairs department, Ramunas Vakietis, explained that students have become extremely selective about what to study. The most popular fields of study, he said, remain those that promise bigger earnings such as business, economics, law and management. "Our students are tending to gain education and be qualified professionals. This makes it easier for them to find their ground in labor market later on," Vakietis said.

Lithuanian education minister Algirdas Monkevicius said in June that the nation faces a skills shortage because too many students want to go to university. Also, he said, young people should be encouraged "to more actively opt to be trained as workers."
According to the Labor Exchange prognosis for 2008, the country will face bigger discrepancies between labor supply and demand, leading to slower economic development.

The labor market analysis was made in all three Baltic countries.