Delayed Layoffs in Germany

I feel sad for not understanding German but I am sure someone is talking about this in the German speaking media. I have a strong feeling we will witness massive layoff rounds in Germany by the end of year similar to what’s currently happening in US and other parts of the world.

Germany reacted well by the Kurzarbeitergeld law. To those who don’t know, the government now allows businesses to furlough employees instead of firing them, and the government pays for the salaries. Furloughed employees get 60% of their salary from the government for the hours they were supposed to work and didn’t. And it exempts businesses from paying anything else to the employee or social security or other employee related commitment.

There are some nuances like ability to do partial furloughs. For example, if an employee is furloughed for 50% of her time, she would get the first half of her salary, and for the second half, she would get only 60% of it. There are other details like if you are married or have kids but this is not the scope of this post.

I believe Kurzarbeitergeld is just delaying the layoffs. Businesses will struggle big time to get back to the level of revenues that allow them to pay salaries, and there will be a point where you can’t make enough money to pay salaries, and can’t furlough employees because you need them to do the work that will get you the money that doesn’t allow you to pay their salary. Then the layoffs will happen.

I am not writing this to spread fear or anything, I am sharing it to learn since I don’t understand German and don’t know what’s being talked about in German media. If you have an opinion on this or information that would make me believe otherwise, lets discuss them in the comments or message me through the “contact me” form above.