Around 470,000 firms in Germany applied for short-time work - Labour Office

Around 470,000 companies in Germany have applied for a government short-time work scheme in March due to coronavirus, the Federal Labour Office said on Tuesday, adding requests had come from many sectors, especially retail, hotels and catering.

Short-time work is a form of state aid that allows employers to switch employees to shorter working hours during an economic downturn to keep them on the payroll. It has been widely used by industry, including Germany's car sector. "That means millions of employees will be able to keep their jobs," Labour Minister Hubertus Heil told a news conference.

He said he could not yet estimate how many people would ultimately go on the short-time work scheme but he expected it to be "significantly more" than during the 2009 global financial crisis. In spring 2009 some 1.4 million employees were on the programme. Peter Weiss, a labour market expert in Chancellor Angela Merkel's Christian Democrats (CDU), told Reuters that number could treble due to the pandemic.

The high number of applications from companies in March - the month during which Germany entered a virtual lockdown - compares with an average of 1,300 companies registering for the scheme per month in 2019 and with 1,900 in February 2020, the Labour Office said. Schools, shops, restaurants and sports facilities have closed in Germany and many firms have stopped production to help slow the spread of the disease.

Data published earlier on Tuesday showed German unemployment rose by 1,000 in March, but the Labour Office warned that this did not reflect the escalation of the coronavirus crisis and its impact on the job market since only figures up to March 12 were included.

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