Job uncertainty grips Norwegians

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After reaping the benefits of a super-strong economy and enormous wealth creation for the past decade, Norwegians now face rising uncertainty as jobs disappear following the sharp fall in oil prices. The job losses have begun affecting workers outside the oil and offshore sector as well, as the ripple effects of the decline in Norway’s dominant industry spread.

Oil, offshore and Industrial employees aren't the only ones losing their jobs now, as cuts spread to other sectors in Norway. Jobs likes these with the state railroad may be more secure, but uncertainty is also spreading within the public sector, where 12 percent fear they'll be laid off. Fully 16 percent fear layoff in the private sector. PHOTO: Jernbaneverket/Ragnhild Aagesen

Oil, offshore and Industrial employees aren’t the only ones losing their jobs now, as cuts spread to other sectors in Norway. Jobs likes these with the state railroad may be more secure, but uncertainty is also spreading within the public sector, where 12 percent fear they’ll be laid off. Fully 16 percent fear layoff in the private sector. PHOTO: Jernbaneverket/Ragnhild Aagesen

A new survey by the independent research foundation Fafo, presented in newspaper Dagsavisen on Friday, shows that fully 16 percent of Norwegian employees now fear being furloughed or fired in the near future. Even more fear they’ll lose their jobs during the next three years, according to the survey conducted for Fafo by research firm Respons analyse. Those hired on a temporary basis fear job losses the most.

“These are quite high numbers, and they reflect uncertainty in the job market,” FAFO research chief Sissel Trygstad told Dagsavisen. She said she’s surprised over how many people are now afraid they’ll lose their jobs, after years of record low unemployment rates and strong demand for engineers and other highly educated and skilled workers. Now they’re among those losing their jobs, or graduating with engineering and advanced degrees and meeting a job market that’s suddenly become tough to enter.

Cuts extend from food to furniture
The uncertainty has spread into the public sector as well as the private, where layoffs are also occurring in businesses outside the oil industry. Companies like food producer Denja in Larvik, Western Bulk Shipping in Oslo and furniture maker Helland Møbler in Stordal are among those cutting staff or, as is the case with Denja and Helland, shutting down production plants entirely. “It’s terrible for the people losing their jobs,” 57-year-old Henning Jensen, a mechanic who represents employees at the Orkla-owned producer of sandwich spreads, told newspaper Dagens Næringsliv (DN) last week. Orkla decided to transfer Denja’s operations to a larger facility in Elverum, and only seven of 35 employees will be transferred as well.

In many cases, the numbers of job losses may seem small by international standards, but collectively they’re adding up to a point where another 31,000 Norwegians were officially registered as out of work at the end of the June. That’s a lot in a country of 5 million where less than 100,000 have been officially unemployed in recent years. DN reported that in Stordal, more than 400 jobs have disappeared in the area’s long-established furniture industry, mostly because many companies have moved production abroad to cut costs. Helland Møbler had 90 employees in Stordal in the 1990s. Now the remains of its production are being moved to Estonia, leaving another 20 people out of work.

At the same time, more than 500 employees of grocery store chains ICA and Coop are likely to lose their jobs when Coop takes over the majority of ICA’s stores after ICA decided to pull out of the Norwegian market. “Everyone hopes it won’t be them,” Geir Inge Stokke, acting chief executive of Coop, told DN earlier this month.

Painful new reality
The pending job losses in the grocery store sector may be seen as coincidental to the downturn in the oil industry, but there’s no question the downturn itself is hurting businesses that have catered to well-paid oil- and oil-supply industry employees on expense accounts. Restaurants, hotels and taxi drivers have been feeling the pain for months, especially in and around Norway’s oil capital of Stavanger, and the ranks of others affected by the oil price dive may be far larger than the statistics imply. That’s because the numbers of people turning up at NAV offices in Norway to apply for unemployment benefits is believed to be lower than the numbers of people actually out of work. Many of those losing their jobs are highly educated, have been highly paid and can live off their own resources, at least until their severance pay runs out. Pride or the sheer disbelief of seeing careers disrupted may keep laid-off engineers or executives from seeking help.

Meanwhile, more companies directly affected by the fall in oil prices were announcing staff cuts nearly every day this past week: 160 at Wärtsila on Thursday, for example, and as many as 200 at Rolls Royce Marine. Havyard Group cut around 100 jobs last week. “The boom we have had since 2005 has now transformed into a market with little demand and extreme price pressure,” Havyard’s CEO, Geir Johan Bakke, told DN. That’s the same problem facing most of Norway’s oil service and supply companies, with state statistics bureau SSB confirming that orderbooks among industrial firms in Norway shrunk by 11.4 percent in the second quarter, compared to the same period last year. “It’s dead everywhere, there’s nowhere to hide,” lamented Sølve Høyrem of Westshore Shipbrokers in Kristiansand, which specializes in supply ships that serve offshore installations. He told DN that the market is terrible, just as the share value of Norwegian offshore firms fell again on Thursday.

At Norway’s biggest company Statoil, which has been cutting jobs for the past two years, the dismal situation has some bright spots. As oil prices dipped below USD 50 a barrel this week, Statoil is benefiting from the suddenly lower prices also being offered by suppliers bidding for work on its huge new Johan Sverdrup oil field development project. As DN reported on Friday, cheaper contracts mean lower investment costs, and potential for higher profits later on.

newsinenglish.no/Nina Berglund

  • frenk

    Its good to know that successive Norwegian governments have been progressive and ‘reform minded’….and that they have modernized the economy ready for the challenges of the 21st century?

    • inquisitor

      The superior intellect, the boon of oil money, the keen eye on the future when oil would no longer be so profitable and the ideas and innovations in place to overcome this eventuality now kick in?

      Where is it?

      https://www.youtube.com/watch?v=HHsKtSz07XQ

      • Golf

        Maybe we just have to wait and see. I think if you guys could predict what is happening now, Norwegian government and leaders could also do the same.

        • frenk

          Are you being serious….these are the people you destroyed the economy in the first place….?

    • Golf

      So, let’s us just keep working and see what may come from that. Crisis affects all countries, but to different extents.

      • frenk

        ‘Working’…….?
        This low oil price will ‘hammer’ Norway as the oil business is ‘the only game in town’….
        Norwegians need to figure out how they will finance their personal debts…..the welfare state in the country is ‘enormous’ which is why taxation levels are so high. With nothing coming in the only way Norway can continue to support all these welfare recipients will be to tap the ‘Norwegian Pension Fund for Future Generations’….I suspect this will start next year?

        • bertonneau

          Having just been to Norway this past summer, Norway has a killer tourism industry, agriculture, high-tech research computer/IT sector. That’s just a few that come to mind off the top of my head. If oil dies than taking some of that incredible huge sovereign wealth fund to quickly retool/retrain for what’s needed inside and outside of Norway in the future will be what’s needed to survive. The schools in Norway aren’t horrible from what I’ve heard and although they may need a little kick in the pants to get going, Norway is inventive enough that it will learn from the past and carry on just fine. That’s more than I can say for the GCC countries who are completely screwed in the next 5-15 years as their relatively non-diverse economies completely fall apart from the fall in oil prices for the next decade or two.

          • frenk

            The tourism industry is a ‘complete joke’….I’ve been travelling around Norway for 3 years with my work….finding something decent to eat is almost impossible. Most of the ‘technical expertise’ from what I can see is provided by foreign workers. Norway is at least 20 years behaviour behind the UK in most areas…..a ‘kick up the bottom’….and ‘re-tooling’….Are you having a laugh?

  • JMNORDIC

    Before discover oil in the North Sea, Norway use to be the poorest of the Nordic Countries because their shallow way of thinking. Then they striked rich thanks to the oil and gas flowing by chance from their sea bed. If the oil and gas industry starts to fading out Norway will be again what it use to be. The Norwegians didn’t learn nothing from the times of welfare, except to be arrogants.

    • frenk

      Great points – we share your pain.

      • JMNORDIC

        Fortunately I don’t have any reason to feel pain. I am just a good will observer who thinks that is a terrible waste when people or countries loose opportunities to learn and improve due to an unjustified pride.

        • frenk

          We discussed this before…..if the quality of teaching is poor…then I’m afraid the quality of the student will always be poor….teaching standards can only be monitored via regular testing/examination of the taught students.
          Think about this…..Scotland is a ‘very comparable’ country to Norway…but we have 10 world class universities….Norway doesn’t have any….

          • Golf

            Oh really?
            Now I can understand why Scotland is the only country not affected by crisis. Higher quality of teaching…!!! University Ranking…!!! The times can be proud of his work.

            • frenk

              We have a thriving academic, cultural, entertainment, sporting and tourism based economy combined with traditional industries……its not only the ‘oil business and welfare’ like Norway….
              My son is 6…..I can sense he is already feeling the ‘competitive nature’ of our culture at school…and this will drive and ‘rule’ his life if he wants to be successful in his chosen profession. Demands will be made of him – he will have (I hope) the highest expectations for himself and his family……in contrast…imagine the ‘average’ Norwegian family today….hotdogs, processed tasteless food, rip-off culture, illness, laziness, enormous personal debt, private financial status available for everyone to see, out of date rules and regulations, welfare….

            • JMNORDIC

              We try to be positive and keep certain level in our comments. Being sarcastic is not only unfair but out of place. You know perfectly well that what you say is not the point.

    • Golf

      Fantastic! And what if Oil price rises again? Who will be playing the next turn in that game?

      • frenk

        There is certainly a future for Norwegian gas….but oil is just too expensive to produce in Norway…..Norwegian costs are excessive. It doesn’t help that lots of materials used are bought from lower cost countries like Denmark and Poland…then ‘re-packaged’ and sold as ‘Norwegian Made’….and sold for ‘big money’….

      • Greg

        Many of the lost jobs will never return to Norway. Why hire someone in Norway when you can hire someone in Eastern Europe for less pay who doesn’t take a holiday every second week and spend 3 weeks a year on sick leave? Norwegians only have themselves to blame for the coming job market weakness.

        • frenk

          Too true….

        • JMNORDIC

          I agree with you.

      • JMNORDIC

        The same lazy ones unable to learn. So poor that they only will have money.