Number of retrenched workers rose by 42% in ’13

The number of retrenched workers in the country ballooned by 42 percent to 45,208 in 2013, from the 31,778 recorded the previous year as more businesses decided to let go of people, citing “economic reasons.”

The Philippine Statistics Authority (PSA) said that such reasons could mean that the concerned companies were not doing well in business because of a lack of market or a slump in demand for its products, due to uncompetitive prices, or to competition from imports.

Also, the companies could be having financial troubles because of high costs of production, lack of capital, the depreciation of the peso against foreign currencies or losses.

Another reason is that the company may be downsizing as part of reorganization, or there may have been a change in management, specially during a merger.

Other possible reasons the PSA cited included lack of raw materials to sustain production or that the company could not afford an increase in the minimum wage.

Among the workers retrenched, the biggest group—16,292—lost their jobs because of reorganization.

Another 11,204 were retrenched because of the financial losses incurred by their employers. Around 10,140 were given their walking papers because their companies’ products were not selling well.

The number of companies that were reported to have retrenched their workers jumped 13 percent to 2,337 last year from 2,064 in 2012, PSA data showed.

Most companies—1,291 of them—resorted to retrenchment because they were downsizing their workforce.

Also, 432 companies reported financial losses, 290 cited a lack of demand for their products and 166 blamed “other” reasons.

Meanwhile, the PSA reported that the job market for large enterprises in Metro Manila was “on an upswing” in the fourth quarter of 2013,—the fastest rate of growth in over three years.

The PSA said in a separate report that for the October-December quarter, the labor turnover rate, or the difference between jobs gained and jobs lost, revved up to 3.22 percent.

This was the highest rate recorded since the fourth quarter of 2010.

Employment in the last quarter of 2013 grew faster than the 2.38 percent recorded in the preceding quarter. The rate was also higher than the 2.47 percent registered in the same quarter the year before.

For every 1,000 enterprise workers in the National Capital Region, a net of 32 people were added during the three months to December.

For every such group, there were 88 new hires against 56 who quit or were fired. The hiring rate was recorded at 8.86 percent, while the separation rate came in at 5.64 percent.

The PSA observed that large enterprises in some subsectors—seven out of 18—took in new employees because of business expansion. These companies outnumbered those that were forced to replace workers who had been fired.

Also, based on the survey, the number of people laid off outstripped those who decided to quit.