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Sunday, 14 December 2014

The economy is growing (reputedly), but at many large companies it is the same ol’ same ol’ as in previous years: mass lay-offs are the name of the game. Perhaps now even more than in recent years.

You know that you are approaching the end of the year, when the leafs are falling from the trees, the company budgets are running on empty and the temporary jobs are disappearing like snow on a sunny day.

During the last six crisis years, many freelance workers and external consultants in the financial and insurance industry in The Netherlands started to get used to the ‘mandatory holiday season’: being sent off from their assignments around December 20th of the old year and not being allowed to return to their principals until January 6th (plus or minus a few days).

Even though the hiring contracts for freelancers and external consultants of such important principals do not disclose anything about this mandatory holiday leave, it has become a fact of life: ‘resistance is futile’ and protesting too loudly means that one could lose his contract for the next year. “Tough break, buddy!”

Unfortunately, however, many internal and external jobs in the financial and insurance industries will be skipped foregood, now that we reached the end of the year. This has been the case in the past years and it will also be the case this year.

In spite of the fact that the Dutch economy has reputedly been improving in 2014, end-of-year still means end-of-contract for many, many internal and external workers and freelancers. And not always because the insurance companies, large banks or other large companies and institutions did not make enough profits in 2014 or suffered from economic headwinds or acute liquidity problems.

Yes, of course there were jobs that have been skipped because of fierce economic headwinds: this happened for instance at companies which are very dependent from the oil and gas industry. The low oil prices of around $60 per barrel mean that a lot of industrial activities, which were very profitable at $100 per barrel, simply are not profitable anymore and must be skipped. These jobs will probably return, when the oil prices start to rise again and there is more leeway for investments.

Nevertheless, the simple truth is that many jobs just disappear because they are not needed anymore: for now and for the distant future. This has especially happened in the banking and insurance industry, where the stream of physical visitors to the brick-and-mortar bank and insurance stores has almost completely dried out, in favor of online visits and operations.

The employees of the bank and insurance stores – as well as these stores themselves – have been overtaken by time and technology and have now been declared obsolete by the highest management of the banks and insurance companies. Some lucky internal workers can keep their job at a different spot in the company, but many people were simply laid off: “Thank you for your efforts in the past and good luck at finding a new job!” 

What is especially sourish for many laid off workers, is the fact that the same banks are hiring other consultants and create other internal jobs in order to fulfil new and different targets within the company, while their own jobs have been annihilated.

Het Financieele Dagblad has written an article about this phenomenon of (service) jobs disappearing at the end of this year:

The X-mas dinner, which was served to the 19,000 Achmea workers and their family members last year, was spoilt in advance. Reason: on 4 December 2013, the insurance company declared that it would cut no less than 4,000 jobs.

This year, the workers at ABN Amro, ING and Vopak (oil and gas storage) are the sitting ducks. And since last week, also the workers at KPN (telecom), the Noordelijke Dagbladcombinatie (NDC; newspaper consortium for the north part of The Netherlands), Philips (lighting, household electronics and medical equipment), Wegener (newspaper consortium), Roto Smeets (paper production), the Jaarbeurs (organiser of trade fairs) and SBM Offshore (services for the oil industry)

After the falling of the leafs, it is traditionally raining lay off announcements. And this year there are even more of such announcements than in previous years. While this is very harsh for the workers involved, it is extremely difficult for companies to think of a better time. The budget for the next year is just finished, the plans are on paper.

According to accountancy regulations, companies can write off the costs of reorganizations in the profits and losses sheets of the old year; sometimes in combination with other financial drawbacks. The financial pain is endured at once, while the fruits of these actions will be picked in the new year.

“Still, it feels like a poor moment to declare job losses in December”, according to Karin Heynsdijk of FNV Finance (labour union). A year after Achmea, she still finds it hard to tell whether the insurance company should not have stepped forward at another time. “Every moment that you bring such a message is a poor moment. It is just a very harsh message for your loyal workers”.

Reinier Castelein of labour union “De Unie” rather emphasizes the scale of the current lay offs. “We should abolish our feelings that these are unconnected incidents. This is a structural thing”, he states with respect to the large amount of lay offs these weeks. Therefore the chairman of De Unie is suspicious regarding the recently published forecast of the Dutch Central Planning Bureau CPB, that employment will improve in The Netherlands next year. He himself expects further reorganizations and further mounting unemployment instead in 2015.

The list of companies in the article, which announced mass lay-offs during the last few weeks, as well as the magnitude of these lay-offs, is quite impressive, as these published lay-offs are probably only the tip of the iceberg:

List of announced lay-offs at large companies in The Netherlands
Data courtesy of: Het Financieele Dagblad (
Click to enlarge
These are serious numbers of lay-offs, that hit many people on the chin; as a matter of fact, I was one of those 1075 external consultants at ING, who had to leave as a consequence of these latest reorganizations.

Yet, I have mixed feelings about the conclusion of union man Reinier Castelein that the economy and employment will not improve during the next year (see red and bold text).

As an independent ICT consultant, I see currently a clear and undeniable increase in the amount of jobs being on offer in the ICT industry. Perhaps even more important is that the list of demands and knock-down criteria for the new employee or consultant seems to be decreasing, in comparison with previous years. This seems to point at a slow emergence of scarcity for personnel in the ICT industry.

While the ICT industry is probably not the most important industry in sheer numbers of jobs, it is definitely a barometer for the state of the economy. The involvement of companies in new ICT projects can give someone a clear idea about future investments and innovation within companies. Many companies kept 'the store open' during the crisis years and invested enough money to stay in course with their ICT infrastructure, but not a penny more.

The fact that the ICT investments seem to be mounting nowadays, tells me that the economy might have found the way up again, as ICT is a driver for new company services, profits and prosperity.

A more serious development for many workers, on the other hand, is that the internet, in combination with the robotization and the computerization of many industries in The Netherlands, will lead to the structural disappearance of ñumerous low-qualified and simple service-oriented jobs. When a robot can do your job 24-7 at a fraction of the cost price and against controllable investments, your job might be gone!

This is not a new development by itself, but it is definitely a paradigm shift at the labour market, which gains strong momentum at the moment. One, that could have far-stretching consequences for many jobs in The Netherlands and abroad. People, who are now doing such jobs, should try to educate themselves and learn new and different skills, in order to be employable in years to come, as their current jobs might disappear soon.

However, this paradigm shift is not a consequence of the economic crisis, but of the increasing ‘computerization’ and ‘internetization’ of society. Nevertheless, this enduring crisis has definitely reinforced this development, as it forces companies to save money, wherever they can. This can be very bad news for the workers and for the development of the Dutch economy as a whole.

So Reinier Castelein might be right and wrong at the same time: wrong in his pessimism about the economic crisis, but right in his pessimism about structural loss of jobs! The future will show the value of his predictions.

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