Crisis bears the bitter fruit of unemployment

Unable to fight the severity of the global crisis, companies in Turkey have reversed strategies and started to lay off staff in an attempt to increase savings.

Just a few months ago amid the first wave of the crisis, the business world said there would be no staff cuts. The view was supported by the reports of international consulting firms. "We have experience from the 2001 economic crisis. This time, we will not lay off staff as the first method for cost savings," said businesspeople, up until a few months ago.

According to an October report canvassing the situation in 14 countries, 73 percent of companies in Turkey were still hiring staff despite the economic climate, while the employment rate was down in many European countries. Another survey held across seven cities and among 120 companies also revealed laying off staff was not among measures Turkish companies were taking, unlike in the United States and Europe. However, as the impact of the global crisis has "landed in Turkish airspace," the picture has changed.

Staff dismissals increased across all industries. As new investments and jobs have almost come to a halt, many large and small-scale firms withdrew their staff requests from human resources firms. All industries have witnessed dismissals over the last month, said Hasan Altunkaya, chairman of Data Expert, a headhunter for big companies in Turkey.

Data Expert launched the "Anatolian Business Partnership" project, envisaging many white-collar workers would be unemployed during the 2001 crisis. The retail, banking and automotive supply industries are the top industries for dismissals, Altunkaya said. Many people have been laid off from bank branches, he said, adding, "Nearly 8,000 people in banking and 3,000 in retail lost their jobs in just one month. In the retail industry especially, the number of people working in shops has decreased. Recently, the same thing has been occurring in the construction industry. Staff who sell properties in developments are being laid off, too."

"Our workload has declined 60 to 70 percent," he said, adding foreign companies that had planned to set up in Turkey and had applied for staff, have also put on the brakes.

Wait-and-see policy
Companies have developed a conservative approach to expenditure and budgets, said Murat Demiroğlu, manager of the human resources services department at PricewaterhouseCoopers. Companies that have revised their strategies to secure more efficient and productive use of existing staff, rather than creating new placements, are pursuing a "wait-and-see" policy, he said.

With regard to the banking and retail industries, which both hired a large number of people over the last three years, Demiroğlu said a more cautious approach was being taken now. Holding back on investments for next year, companies plan to focus more on staff training, Demiroğlu said.

In a similar stance, managing director of Alexander Man said companies are following a "wait-and-see" policy. There is a decline in demand for staff recruiting, said Zeynep Akalın.