ECONOMY

Thousands of layoffs expected in commerce sector

The National Confederation of Greek Commerce (ESEE) is expecting up to 100,000 layoffs in its sector as traders respond to the difficult financial conditions. This is its estimate after a preliminary analysis of financial statements to be used toward the drafting of ESEE’s annual report on commerce. The organization’s president, Vassilis Korkidis, presented the conclusions of the report, compiled using a sample of 1,082 companies, suggesting that the estimates for this year show that seven in 10 expect a decline in both sales and profits. Some 70 percent foresee a drop in cash flow, from a 43 percent fall last year. Half of the companies do not have outstanding bank loans and it is significant that, of these, it is the very small ones that have managed to sustain themselves without ever having resorted to loans. Moreover, nine out of 10 companies do not expect to make any investments within 2010. The company forecast capacity index is negative compared with previous years as far as employment is concerned: Some seven in 10 will try to retain their staff in 2011, but this ratio drops among the bigger companies. The estimate that the remaining three companies in 10 will possibly proceed with layoffs is based on data gathered from the default-loan register Teiresias that 65,000 companies are in the red today and these employ 100,000 workers, while it is always likely more will be added, Korkidis explained. «Since the state of the economy is so bad, the activation of the third package of measures through the Guarantee Fund for Small and Medium-Sized Enterprises and the National Strategic Reference Framework is imperative, as well as the lifting of counterincentives on companies set by the state,» said Korkidis.