Are European labour laws forcing IT companies to stall layoffs?

It is reported that the labour protection laws in Europe are forcing companies such as Google and Amazon to stall their layoff process in some countries. Labour laws tend to differ from one location to the other and can be very complicated at times.


European labour laws require organisations to discuss the layoff process with the impacted employees before carrying out the exercise. As a result, many firms that have laid off thousands of their staff members earlier have still not been able to wind up the layoff process due to the intervention of employee interest groups, whose negotiations tend to carry on for long periods of time. Employees are also wary of such endless negotiations that tend to delay the settlement process following layoffs.

Media reports say that companies in Europe are offering about a year’s salary to get employees to leave voluntarily, instead of handing them pink slips. Others, such as Google are opting to discuss the layoff process with elected employee representatives who sort out the workforce and settlement issues with the management. The process is naturally time consuming as it involves innumerable rounds of discussions, as well as collection and collation of information and data amongst others.

In such a scenario, it is not surprising that firms prefer to see their employees leaving of their own accord, that is, voluntarily. In other words, employees who are willing to leave are offered attractive severance pay in return for their formal resignations.

Another option being offered by some companies, such as Amazon, is a year’s pay in exchange for the resignations of senior officials who have been with the company for at least five years.

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