Wage cuts and lay offs are unlikely to improve financial performance of Belarusian industry
According to the National Statistics Committee, in January 2016, industry’s net loss totalled BYR 15.5 billion, regardless of wage cuts to USD 328 and more lay-offs than hires by 2 787 people. The main reason for the losses was revaluation of foreign currency loans amid a decline in production volumes. Given the continued negative trend in the industry, further lay offs are on the way, more employees will work only a part-time, wages will fall below USD 300 and unprofitable enterprises will grow in number. Soon more than 40% of large and medium-sized enterprises may become unprofitable due to currency exchange differences, which will restrict their access to loans and deteriorate the situation with payments in the economy.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.