Tag: ERTE

Unemployment Rose by 282,891 People in April to 3.9 Million, with 25,000 More People Out of Work in the Construction Sector

Almost 3.9 million people were unemployed at the end of April, the highest figure on record since May 2016. Moreover, 25% of those in work and registered for Social Security, 3.4 million people in total, are affected by an ERTE.

Coronavirus caused unemployment to soar in April by 282,891, or 8%. That represents the largest increase in the month of April in the entire historical series, according to data from the Ministry of Labour and the Social Economy published on Tuesday. Moreover, 25% of those in work and registered for Social Security, 3.4 million people in total, are affected by an ERTE.

In this way, almost 3.9 million people were unemployed at the end of April, the highest figure on record since May 2016, having increased by 7.97%. The unemployment data for April, like that for March, does not include those workers who have been temporarily suspended from work or whose hours have been reduced as a result of an ERTE, since the definition of ‘registered unemployed’ does not consider them to be unemployed. It should be noted that April saw the destruction of fewer jobs than March.

Quabit Negotiates an ERTE for 66% of its Workforce

The property developer is negotiating a temporary employment regulation file (ERTE) with its workers that will affect all of its delegations in Madrid, Guadalajara, Malaga and Valencia.

These are the first employees of a large Spanish real estate company whose working conditions will be affected following the outbreak of the coronavirus crisis. Quabit, the residential property developer led by Félix Abánades, has presented its workers with a temporary employment regulation file (ERTE), which will affect 66% of the workforce, as confirmed by the company to the National Securities Market Commission (CNMV) after it revealed the news to Brainsre.news.

Quabit currently has 91 employees distributed across its offices in Madrid, Guadalajara, Malaga and Valencia.

Servihabitat Applies an ERTE for Between 20% and 50% of its Workforce

The servicer is going to apply a cut of 20% for two thirds of the workforce for six months, and of 50% for the remaining third for three months and of 20% the following quarter.

The manager Servihabitat, which is owned by Lone Star (80%) and CaixaBank (20%), closed an agreement with its workforce at the weekend to apply a temporary employment regulation file (ERTE) of between 20% and 50%. The real estate platform will pay a supplement so that all of its employees receive between 70% and 90% of their gross salaries, according to El Confidencial.

Servihabitat, one of the largest servicers in Spain, has been the entity that has taken the greatest employment measures to adjust to the economic shutdown. The company has about 800 employees. Intrum, the owner of the former Aktua, Lindorff and Solvia, is also conducting an ERTE for 600 professionals.

Fortress Is Preparing For Another ERE At Geslico

12 February 2015 – El Confidencial

Fortress, the alternative investment fund that bought the savings banks’ financing business, has announced to its employees that is it going to undertake a statutory redundancy procedure (un expediente de regulación de empleo or ERE) at Geslico, the subsidiary dedicated to loan recovery. Although the US entity has not quantified how many people will be affected by the drastic measure, sources close to the firm say that almost 40% of the workforce could be made redundant.

Geslico, the group formed by three subsidiaries with headquarters in Madrid, Valencia and Zaragoza, currently employs 450 people, of which around 200 could be made redundant as a result of the ERE. Although Fortress has not yet explained the real reasons for adopting this measure, sources close to the company explain the that job cuts are due to the loss of business resulting from the mergers of savings banks.

The announcement was made at Paratus, the business centre created by Fortress in Barcelona to manage all of the acquisitions the fund has made in Spain since it started to buy non-performing loans from financial institutions such as Banco Santander and debt from the real estate company Realia. Subsequently, between 2012 and 2013, Fortress acquired Lico Leasing, the holding company that provides financing to companies in the Spanish Confederation of Savings Banks (Confederación Española de Cajas de Ahorros or CECA), and Geslico, which it bought for almost €220 million.

Nevertheless, the name Fortress gained notoriety in Spain when the fund tried to sell 300 homes it had bought from Sareb, at a much higher price than the State’s bad bank had agreed to transfer them to a group of individuals.

These types of funds, known as opportunistic or vulture funds, have become the new owners of mountains of unpaid debt – estimated to amount to €50,000 million – which originated from the balance sheets of Spanish banks and was transferred for a price significantly below its face value. Subsequently, these funds manage the debts by trying to negotiate long-term payment plans with the borrowers to recover the initial amounts loaned.

The ERE at Geslico is not the first to be proposed by Fortress, which already significantly reduced Geslico’s workforce, at the end of 2013. At that time, Paratus informed its employees that 174 of the 470 strong workforce were going to be made redundant, with their contracts terminated. Another 40 were told that their employment contracts would be suspended temporarily (una suspensión temporal de empleo or ERTE), which was to result in 210 employees losing their jobs on a permanent or temporary basis. In the end, following internal negotiations, the list of redundancies was reduced to 120 people.

Prior to this, in 2012, the shareholders of Lico Corporation, which included BBVA, Banco Sabadell, Mapfre, Ibercaja, Unicaja, CECA, Novagalicia, CatalunyaCaixa and Bankia, amongst others, had already announced a redundancy procedure, which affected 95 of the 230 employees at the financing company.

In the most recent annual report filed by Fortress, the fund claimed that it had “confidence in the robust future of Geslico’s activity, due to its broad range of clients and the trend towards outsourcing debt recovery work”. Nevertheless, it warned in its forecast for 2014 that “annual recoveries may decline slightly with respect to 2013, as a result of the restructuring of the banking sector and the reduction in lending in recent years”. The reality has proven to be worse than expected and Geslico’s employees are paying the price.

Original story: El Confidencial (by Agustín Marco)

Translation: Carmel Drake