Mass layoffs in IT sector in Serbia too: Following share plummeting on stock exchanges, European companies fire employees in hundreds
Source: eKapija
Thursday, 31.10.2024.
14:47
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Illustration (Photo: Pixabay / AlfredMuller)
The information that Better Collective has laid off numerous employees made waves yesterday, primarily on LinkedIn, when one of the employees from Serbia announced that “to all colleagues who were laid off from Better Collective today, me among them, I want to offer free career advice services if they need help with finding a new job.”
One after another, the posts started being made, including that of the CEO and founder of this company, Jesper Sogaard, titled “Some emotional days for Better Collective.”
IT consultant: Situation expected
The press has not been given the exact number of the fired employees, and unofficially, as eKapija learns, between the two companies, it’s a total of several hundred employees. Their official press release regarding the new situation can be found HERE, but more information about this, as they said, will be provided in November. As for Playstudios, the unofficial information is that around 75-80% of the team members have been fired.
This situation, according to eKapija’s interviewee, Nikola Pejovic, a financial consultant in the IT industry in Serbia, who has been following this activity on the stock exchange for the past twenty years or so, is not unexpected.
– What happened to them is very usual for companies listed on stock exchanges, and Better Collective is present on the stock exchanges of Denmark and Frankfurt. After the most recent quarter, they had to adjust their projections, because things weren’t exactly the best and they had to inform their stakeholders that the profit will be lower than expected. In such situations, there’s great pressure on the management, because they have to cut costs, and at IT companies, the biggest costs are salaries, which make up as much as 80% of the costs. They obviously expected a lot from acquisitions in Brazil, but all things considered, the American market did not bring them the kind of profit they expected – Pejovic said for eKapija.
We are no longer the cheapest workforce
According to his opinion, this is certainly not the only case and he also reminded of the recent case of the firing of programmers and other employees at the French company Playstudios, which laid off more than 100 employees in Serbia. Serbia, as he says, is not the only country where engineers lost their jobs due to these cuts. According to some information, Better Collective has closed its whole office in Portugal.
– When decisions about such cuts are made, the management is not thinking about where it is closing its departments, but where things cost them the most. And Serbia is no longer the cheapest in that industry. In that sector, when it comes to the salaries, we are in the range of Poland and the Czech Republic, and at the moment, the workforce in Latin America, excluding Brazil, is the cheapest. In that sense, investors are currently turning to employing engineers in Honduras, Costa Rica, who are cheaper and are in the same time zone as Brazil, which is of great importance for the work – Pejovic says.
Judging by that, here in Serbia, we will no longer laugh so much when watching the clips in which a programmer goes to a job interview and the list of requests includes the understood bonuses, the company’s shares, a massage, a Sony PlayStation 5, a three-week summer vacation according to the “put your finger on the map” principle, not to mention additional life and health insurance. Benefits the kind of which other employees in Serbia couldn’t even imagine were reality at some companies, but so were some not so nice examples of employment contracts where the programmer would simultaneously sign the summary dismissal. When branch offices are shut down, such employees are not compensated in any way.
Perhaps the state can help
Considering that such financial cuts are mostly unexpected, Pejovic says that there’s not much that can be done to protect the employee. One possibility is that, if the state is giving subsidies and facilities to those investors, it can require a certain type of employment contract.
– IT employees are certainly very much still in demand and that will remain so, despite the fact that we are no longer the cheapest, because we are culturally closer to the West, we speak English well and we do that job well. But certainly, my advice to everybody in that field is to constantly work on raising their value and upgrade and acquire the knowledge necessary for them to be an in-demand “good” in the market – concludes Pejovic.
D. S. G.
Tags:
Better Collective
PlayStudios Europe
Microsoft
Google
Jesper Sogaard
Nikola Pejović
layoffs
share value drop
employee layoffs
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