Read news from:
Austria
SHARE
COPY LINK
For members

WORKING IN SWITZERLAND

Why are some international companies in Switzerland laying off staff?

While many employers in Switzerland are desperately looking to hire workers, others have been, or are planning to, cut hundreds of jobs. Why is this?

Published: 24 October 2023 12:42 CEST
Why are some international companies in Switzerland laying off staff?
Hundreds of people lost their jobs at the headquarters of the International Committee of the Red Cross in Geneva. Photo by Fabrice COFFRINI / AFP

Switzerland has been impacted by a massive worker shortage for many months, with a number of companies in various sectors unable to find qualified personnel to fill vacant positions. 

This workforce scarcity is “at its highest level in Switzerland,” according to a recent report by the University of St. Gallen.

The consequences of this shortage, the report pointed out, could be dire, affecting the country’s economic development and, consequently, its prosperity as well.

READ ALSO: Why is Switzerland’s chronic labour shortage worsening? 

Logically, when the demand for workers outstrips the supply, companies should be actively recruiting new employees to fill the vacancies, not firing old ones.

But this is what some international companies have been doing — or are planning to do in the near future.

Who has been laying off employees, and why?

The most sweeping layoffs — about 3,000 jobs — happened in the banking sector, when UBS took over Credit Suisse earlier this year.

The reason for these cuts is to recoup the 3 billion francs that UBS had to spend to rescue its rival and to avert a banking crisis of global proportions.

The overall restructuring will cause 2,000 additional redundancies in Switzerland over the next couple of  years.

Other multi-nationals have been laying off employees as well.

In Zurich, for instance, Google has laid off more than 200 people since March.

The usually employee-friendly global technology giant cited corporate restructuring and “more effective business design” as a reason for job cuts.

After years of growth, the company has become too big and now wants to downsize, it said at the time.

And in September, the International Committee of the Red Cross (ICRC / CICR) announced the laying off of 270 employees from its headquarters in Geneva.

More cuts could be announced in November, once the humanitarian organisation completes its budget process for 2024.

The reason for these layoffs are reduced aid budgets (that is, less money donated by various governments) that can no longer meet escalating humanitarian needs across the world.

READ ALSO: Which foreign workers are entitled to unemployment benefits in Switzerland?

 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

WORKING IN SWITZERLAND

The pitfalls of Switzerland’s social security system you need to avoid

In most cases, Switzerland’s social benefits system functions well. But there are also some loopholes you should know about.

Published: 24 April 2024 13:37 CEST
The pitfalls of Switzerland's social security system you need to avoid

The Swiss social security system has several branches: old-age, survivors’ and disability insurance; health and accident insurance; unemployment benefits, and family allowances.

This is a pretty comprehensive package, which covers everyone who pays into the scheme for a wide variety of ‘what ifs’.

As the government explains it, “people living and working in Switzerland benefit from a tightly woven network of social insurance schemes designed to safeguard them against risks that would otherwise overwhelm them financially.” 

But while most residents of Switzerland are able to benefit, at least to some extent, from this system, others don’t.

What is happening?

If someone becomes ill or has an accident, Switzerland’s compulsory health insurance and / or accident insurance will cover the costs.

However, a prolonged absence from work can become costly.

That is especially the case of people employed by companies that don’t have a collective labour agreement (CLA), a contract negotiated between Switzerland’s trade unions and employers or employer organisations that covers a wide range of workers’ rights. 

READ ALSO: What is a Swiss collective bargaining agreement — and how could it benefit you?

It is estimated that roughly half of Switzerland’s workforce of about 5 million people are not covered by a CLA.

If you just happen to work for a company without a CLA, your employer is not required to pay your salary if your illness is long.

You will receive money for a minimum of three weeks – longer, depending on seniority — but certainly not for the long-haul.

You may think that once your wages stop, the disability insurance (DI) will kick in.

But that’s not the case.

The reason is that DI can be paid only after a year after the wages stop. In practice, however, it sometimes takes several years of investigations and verifications to make sure the person is actually eligible to collect these benefits, rather than just pretending to be sick. 

In the meantime, these people have to use their savings to live on.

What about ‘daily allowance insurance’?

Many companies (especially those covered by a CLA) take out this insurance, so they can pay wages to their sick employees for longer periods of time.

However, this insurance is optional for employers without a CLA is place.

As a result, small companies forego it because it is too much of a financial burden for them.

And people who are self-employed face a problem in this area as well: insurance carriers can (and often do) refuse to cover people they deem to be ‘too risky’ in terms of their age or health status.

Critics are calling the two situations —the length of time it takes for the disability insurance to kick in and gaps in the daily allowance insurance—”perhaps the biggest failures of the social security system.”

Is anything being done to remedy this situation?

Given numerous complaints about the unfairness of the current system, the Social Security and Public Health Commission of the Council of States (CSSS-E) will look into the “consequences of shortcomings and numerous dysfunctions in long-term illness insurance.”

But not everyone in Switzerland sees a problem in the current situation.

According to the Swiss Insurance Association (SIA), for instance, “making daily sickness allowance insurance compulsory for employers would not have the desired effect. Due to false incentives, it would only exacerbate the upward trend in costs and premiums.”

SHOW COMMENTS