Dismissal of managers in the Coronavirus. Loss of management positions

As a result of the severe economic and health crisis caused by the pandemic, around 21,000 jobs for managers and senior executives have been lost in the first half of 2020. Our law firm has lawyers who specialise in advising executives.

According to information contained in the newspaper Expansion, the coronavirus has been a real blow to the economy: an unprecedented collapse in GDP, the departure of hundreds of thousands of workers from the labour market (either temporarily through an ERTE or by losing their jobs), the collapse in the income of most companies and the closure of a large number of them. And the crisis has also taken its toll on the number of company managers, with 15,800 jobs in this category being destroyed in the first half of the year. And it is not a uniform movement, as the private sector has lost 21,900 directors and managers compared to the end of 2019, while the public sector has increased its workforce by 6,100 employees.

Remember that if you are a manager, and you are being affected by a labour crisis or employment problem, G.Elias y Muñoz Abogado is a benchmark in the sector.

Specifically, the private sector has seen the number of managers in its ranks plunge by 4% over the last year, to 694,900 such workers in the second quarter, and the trend has worsened during the first half of the year, after the outbreak of the coronavirus, according to the latest figures from the Labour Force Survey, published by the National Statistics Institute. Although this reduction has been less than that of the labour market as a whole, it should be borne in mind that this type of employee has greater stability in the short term, due to the fact that it is often necessary to have a person in charge of each area in a company, even if that area is reduced due to a fall in demand.

However, the medium-term trend is also downward. In the last decade, the number of managers in the private sector has fallen from 857,200 workers at the peak in 2011 to less than 700,000 today and, although the decline has been greater in times of crisis, it has also continued during the boom. Perhaps the reason is precisely this difficulty in adjusting these jobs in the short term, which has led companies to look at adjustments in this type of workforce from a broader perspective, merging departments or reducing middle management even during growth phases.

This trend, however, contrasts sharply with that experienced by public managers. These positions suffered a severe adjustment during 2012, as the workforce went from 79,400 in this category in the fourth quarter of 2011, when Mariano Rajoy took office, to 62,200 a year later, falling to around 50,000 in the following years. However, this trend changed in the last two years, when the number of managers in the Administration increased sharply again, and has accelerated significantly in recent months, perhaps with the splitting of ministries following the formation of the coalition government, as the number of managers in the public sector rose by 6,100 people between the fourth quarter of last year and the second quarter of the current financial year, an increase of 11.7%. This is despite the fall in public revenue.

It should be borne in mind that many experts around the world recommend maintaining or increasing public spending in the short term to prevent the fall in GDP due to the pandemic from worsening, but at the same time they advise starting to plan the groundwork for fiscal adjustment, with the aim of conveying to investors in public debt the desire to reach a scenario of debt sustainability in the medium term. And this can be done both through reforms that will bear fruit in a few years (as would be the case of pension measures) and through budgetary containment of current spending in order to put the focus entirely on productive spending, something that for now is not being seen, rather the opposite is happening.

By region

By type of manager, the hardest hit are those in service companies not related to the hotel and catering industry (with the loss of 11,400 jobs), followed by managers of administrative and commercial departments (5,700), which contrasts with the rise in production and operations managers (4,200 more jobs). By autonomous communities, the biggest hit is concentrated in the Canary Islands, with the loss of three-fifths of all managers (9,200 jobs), followed by Catalonia (5,400).

In addition, another thing that has been observed during the pandemic is that the number of underemployed managers has tripled compared to the previous year, rising from 5,500 workers in this situation in 2019 to 18,400 today, the highest for six years. A large number of managers, in both the public and private sectors, worked below their potential in the second quarter of the year, either because they were engaged in tasks below their rank (due to the ERTE of other employees in their company, for example) or because of the lower number of hours worked. And this second hypothesis could be the most accurate, since the hours worked by managers fell by 24.5% in the last year, compared with 22.9% in the labour market as a whole.