Anticipating and managing the impact of change
ERM report 2020: Restructuring across borders
Published:
10 November 2020
Updated:
22 July 2021
Research report
Abstract
This report has a dual focus. First, it reviews recent restructuring activity in the EU, from January 2019 up to and including the first impacts of the COVID-19 crisis. The second part presents an analysis of transnational restructuring cases – those that affect workers in more than one country. The main source for both analyses is the European Restructuring Monitor events database, which has collected details of over 25,000 large-scale restructurings since it began in 2002, including nearly 2,000 since the beginning of 2019. The review of the data on transnational restructuring is complemented with a summary of case studies based on international relocations of production. The aim is to highlight the types of dispute that arise, how the restructuring is managed by management and the social partners, and what the outcomes are for the workers affected.
Key findings
Around 1 in 20 cases of large-scale restructuring are transnational, affecting activities in at least two countries. The employment effects of such cases tend to be much larger and the restructuring processes longer and more complex as a consequence. Large-scale transnational restructurings in the EU involve on average around 3,000 job losses.
All restructuring activity is cyclical, with peaks coinciding with recessions, but transnational restructuring activity is particularly sensitive to the business cycle. Both the frequency of cases and the size of cases (in job losses) increases relatively faster during economic downturns, including that provoked by the COVID-19 crisis.
The COVID-19 crisis led to a doubling of restructuring job loss in the first six months of 2020 compared to the rolling average. The labour market impacts have been highly selective, with the two broad sectors most disrupted by physical distancing measures – transport (including air transport) and hotels and restaurants – accounting for nearly half of overall announced job loss (compared to less than 10% in ‘normal times’).
The capacity of European Works Councils to influence restructuring processes is limited, and these limitations are more obvious when multinational decision-making concentrates at the global level – rather than local, national or EU level – as is increasingly the case.
List of tables
Table 1: Announced job loss and job creation, by broad sector, EU27, Norway and the UK, 2019–Q2 2020
Table 2: Top five offshoring cases, EU27, 2019–Q2 2020
Table 3: Cases of announced job loss and job creation in the car components subsector in Member States and the UK, 2019–Q2 2020
Table 4: Top five cases of announced job loss, EU27, 2019–Q2 2020
Table 5: Top five cases of announced job creation, EU27, 2019–Q2 2020
Table 6: Amazon full-time employee headcount, selected Member States and the UK, 2020
Table 7: Largest COVID-19-related announced job loss restructuring cases, EU27 (national) and worldwide (transnational), March–June 2020
Table 8: Sector and location details of nine transnational offshorings studied
Table A1: MNEs with most restructuring cases, 2005–Q2 2020
Table A2: MNEs with most restructuring cases (2005–Q2 2020) – geographical distribution of employment, 2005–2019
List of graphs
Figure 1: Change in full-time and part-time employment (in thousands), quarterly year on year, 2009–2019, EU27
Figure 2: Announced job loss and job creation, by broad sector, EU27, Norway and the UK, 2019–Q2 2020
Figure 3: Announced job loss cases (%), by restructuring type, EU27, Norway and the UK, 2019–Q2 2020
Figure 4: Origin and destination countries for offshoring, selected Member States and the UK, 2019–Q2 2020
Figure 5: Breakdown of restructuring type by company size, EU27, Norway and the UK, 2008–Q2 2020
Figure 6: Case count and announced job loss and job creation in national restructurings, EU27, Norway and the UK, Q1 2019–Q2 2020
Figure 7: Case count and announced job loss in transnational restructurings, EU27, Norway and the UK, Q1 2019–Q2 2020
Figure 8: Announced job loss distinguished according to whether COVID-19 was indicated as a reason for restructuring, EU27, Norway and the UK, Q2 2020
Figure 9: Announced job loss (%) distinguished according to whether COVID-19 was indicated as a reason for restructuring, by sector, EU27, Norway and the UK, 2019–Q2 2020
Figure 10: Transnational share of ERM cases (%), 2005–Q2 2020
Figure 11: Transnational restructurings – total announced job loss and as share of job loss in national cases, 2005–2020
Figure 12: Restructuring cases (%), by job-loss size category and time frame, 2005–Q2 2020
Figure 13: Transnational and national restructuring cases (%), by restructuring type, 2005– Q2 2020
Figure 14: Restructuring job loss in national and transnational restructurings (%), by broad sector, 2005–Q2 2020
- Number of pages
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48
- Reference nº
-
EF20024
- ISBN
-
978-92-897-2110-3
- Catalogue nº
-
TJ-AL-20-001-EN-N
- DOI
-
10.2806/581084
- Permalink
Cite this publication
Eurofound (2020), ERM report 2020: Restructuring across borders, European Restructuring Monitor series, Publications Office of the European Union, Luxembourg.
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