Brazil and Germany: Covid hits occupation levels

32,800 individuals working in the footwear segment lost their job in Brazil. The equivalent of 12% of the entire workforce active in the segment as of January 2020. Brazil’s footwear segment expects production for 2020 to be about 30% lower, to levels of 16 years ago. Meanwhile, 50% of companies operating in the footwear and leather goods’ segments in Germany, have announced they will be laying off a part of the employees, as stated by the IFO, the Institute for Economic Research based in Munich. Covid hits occupational levels hard.

Covid hits Brazil

85% of Brazil’s production is destined to be sold within the national border. The forced shutdown of stores across many regions of the South American country, caused by the pandemic, joint with the lower export numbers, has caused a wave of layoffs across the footwear industry. According to Abicalçados (Associação Brasileira das Indústrias de Calçados), 32,800 people have been laid off from the period going from March 19^th to May.

“We forecast footwear production to decrease by about 30% – commented Haroldo Ferreira, the association’s executive president -. This means that this year we will produce 260 million less pairs than the previous. It will be the level at which we were 16 years ago”. Brazil’s footwear export decreased by 40% in volume and 61% in value, during the month of April. Abicalçados expects revenue from foreign sales to be between 22% and 31% lower this year: the worst performance since 1983.

Covid hits Germany

According to a survey by IFO (Institute for Economic Research based in Munich), 48% of German companies in the footwear and leather goods’ segments have already decided to lay people off. It’s the 2^nd highest percentage after that of the hospitality segment (50%). In other words, it’s the highest percentage of any industrial segment. The institute highlighted the pessimist view of leather operators, reporting the responses of such businesses when asked if they had already decided to cut personnel or not renewing those with expiring contracts.

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