The global crisis we are currently experiencing is very different to the one of 2001. The profile of the unemployed presents a completely different picture. In the last year at least 1.25 million people are believed to have lost their jobs. High level executives account for just 1 percent of those who have been laid off. The losses are only just starting in middle management. Those hit hardest are personnel in sales and marketing departments and unskilled workers in production.
The global crisis which first began to make itself felt last summer is developing in a very different manner to the one in 2001. This difference is clearly visible when one looks at the profile of the unemployed,. The latest crisis has hurt export-oriented automotives, white goods, furniture and textile sectors in particular. In these sectors, first of all the blue collar workings in production and then low level management, such as foremen, have become unemployed as a result of the crisis. Aylin Coşkunoğlu Nazlıaka, one of the founding partners of Human Resources Management, says: “One third of blue collar workers have lost their jobs.” Thirteen percent of those who have lost their jobs, that is to say more than 160,000 people, are estimated to be from this category of first level managers.
It Has Affected Sales And Marketing
One needs to include the dealer network when calculating unemployment in the automotive sector,. There are 4,000 automotive dealers in Turkey, of whom 1.500 are authorized dealers. The number of people working in these dealerships is calculated at 100,000. According to Mustafa İduğ, the board chairman of the Aegean Automotive Association (EGOD), nearly 35,000 people working in this field have lost their jobs, 80 percent of them in sales and marketing.
When business is going well, companies recruit a lot of people to sales and marketing departments, and, in the same way, people in these positions are also the first to go when they reduce their workforces. Murat Önay, the head of the White Goods Industrialists’ Association, stresses that layoffs in the 120,000 person sector occur first in production and then sales and marketing.
Blow To The Middle Tier
According to a study by Prometheus Danışmanlık of white collar workers in 180 companies in different sectors, the white goods workers who are most concerned about losing their jobs work in, in order, the sales and marketing, production and import and export departments.
Companies which take measures and recover rapidly in times of crisis periods, mostly merge departments which are similar to each other under a single manager. Doğtaş Board Chairman Davut Doğtaş says: “In such periods we merge departments. If the department is not essential, we abolish it.”
It Has Hit New Recruits
This time, the people to be hit first by the wave of employment are new recruits and new graduates. According to Prometheus Danışmanlık General Manager Yücel Atış 20 percent of the white collar workers who have been laid off are those who have been newly recruited or are working as Management Trainees. The philosophy of “first in, first out” means that those who have been newly recruited are the first to be laid off. Fortune Danışmanlık General Manager Ayşen Arıduru is of the same opinion. In any case, the data from Turkstat demonstrate the desperate situation of unemployment among young people. According to the data for January 2009, the youth unemployment rate was 28 percent. This means that more than one in four young people is unemployed. At this time, companies are able to avoid paying high redundancy payments by laying off personnel who have been newly employed.
What Will Happen To Upper Level Management?
The rate of unemployment amongst CEOs, general managers and assistant general managers is estimated to be very low at around 1 percent. But even this means 12,500 high level executives. According to the economist Mustafa Sönmez, companies are currently reviewing salaries at higher levels and are asking for sacrifices or cuts in wages. The best example of this occurred last December in Koç Holding. The Koç Holding management offered not to have a salary increase in 2009. But if the crisis deepens, the cost circle will increasingly contract and, as a result, more radical measures will need to be taken.
500,000 New Unemployed?
All the experts are unanimous in saying that unemployment will rise until the end of the year. Seyfettin Gürsel thinks that non-agricultural unemployment will increase to over 4 million at the end of the year and adds: “There is such a strong unemployment dynamic that the figures may slow because of seasonal effects in the summer months but at the end of year more than 1.5 million people will have become unemployed compared with 2008.” This also means that there will be at least 500,000 new unemployed.
Where Will The Second Wave Come From?
There is considerable debate about which sectors will account for the 500,000 people who are expected to become unemployed by the end of the year and which positions they will come from. There are various forecasts for which sectors, and at what level, the second wave of unemployment will hit.
Layoffs appear to have come to a halt in the automotive sector, which has received a boost from the reduction in the Special Consumption Tax (ÖTV). But, if the European markets do not open up, unemployment in the automotive sector could continue and soar to high levels.