Job losses hit 73,000 in worst year of slump

JOB losses spiralled out of control in 2009 with 73,000 redundancies across the economy.

The services industry was hardest hit as 25,369 jobs went to the wall as lack of demand compounded the difficulties faced by the sector.

In its worst year since the slump hit, the economy lost more than 1,400 jobs a week as thousands of small companies axed jobs to try and survive.

In its review, the Small Firms Association claimed there is no employment strategy and said the Government must:

Eliminate employers’ PRSI for all new job creation and reduce it to support existing jobs.

Tackle energy costs by giving the ESB and Bord Gáis dividends as rebates to business customers on their energy bills.

Cut local authority commercial rates to business by 10% in 2010.

The SFA is also calling on the Tánaiste to reopen applications to the €250m Employment Subsidy Scheme and to broaden the criteria to include micro companies – those that employ fewer than 10 people (which amount to 90% of all businesses in Ireland).

“It is vitally important that we don’t allow a whole new generation to be lost to long-term unemployment or emigration,” said SFA assistant director Avine McNally.

The figures on job losses are a sharp reminder that the cost of “doing business in Ireland” for small businesses will have further consequences for the employment prospects of Irish workers, she said.

The redundancy figure of 73,000 & to end November 2009 represents a massive hike of 56% on the same period in 2008, said the SFA.

Despite drastic cost-cutting measures, “the outlook for job creation is particularly poor”, Ms McNally said.

“We expect to see further erosion of jobs in 2010 as investment and business confidence remains weak, with no reduction in business costs and the international credit crunch still causing liquidity and cash flow issues for the small businesses sector,” she warned.

Job losses in the services sector amounted to 35% of all jobs lost in 2009. These losses are being aggravated further by the serious absence of consumer spending in the economy at present, the review found.

“The manufacturing sector shows the loss of just over 14,000 jobs; given the global pressures and costsassociated with doing business in Ireland this sector maintains a worrying downward trend.”

According to Ms McNally of particular concern “is that our ability to create new jobs to compensate for these losses has been severely damaged by losses to competitiveness in recent years”.

At present “there is a clear need for the Government to now prioritise the restoration of cost competitiveness to the small business sector, which is the only way to stop the haemorrhage of jobs”, she said.

Since 2000, Irish competitiveness, measured by the Central Banks Trade Weighted competitiveness index) has declined by 30%. While firms have cut costs, government charges are beyond their control, the review found.

“In the absence of reductions in these costs, small businesses will continue to have to further reduce the costs that are within their control, and this will inevitably mean a further loss of jobs,” it warned.