Brazil’s unemployment rate rose in June to the highest since April 2012, signaling a weakening labor market after five quarters of below-forecast economic growth in Latin America’s biggest economy. In addition, Brazil’s formal job creation in the first half of 2013 was the weakest for the period in four years, the Labor Ministry has recently reported. One insider has recently told us how retail company Le Lis Blanc (directly linked to the consumer sector) has laid off 500 employees all at once without making big noise.

And now, a recent Valor article has highlighted how busy staffing companies are working to help reposition laid-off employees, particularly at the executive level.

Here is a summary of the article:

“Their amount of work has increased, on average, 25% this year compared to 2012. Some companies from sectors that were not used to give this kind of benefit, as private-equity funds, law firms, advertising agencies, hospitals and laboratories have also begun to offer outplacement services. The goal of outplacement is making the dismissed employee more assertive and increase the chances of finding a new job faster.

However, with more customers and less companies hiring, consultancies say the outplacement time is now two months longer, totaling over six months.

“The slowdown began in the second half of 2012. But while layoffs last year were based on performance, [job cuts] this year are due to restructuring,” says one staffing consultant. Right now, one of his clients, a large listed company, plans to lay off 400 people in this second half, including executives. He also said the number of job openings on the market fell 28% from January to June, compared to the first half of 2012.

Two things are driving layoffs: the slowing economy and an uncertain scenario, which lead companies to cut costs. “In 2012, the executive could find a new job within six months. In the first half, the average time rose to eight months… The market is not opening higher-level positions,” says another professional. “When the economy is bad, our business goes well”.

He believes that executives sacked this semester will take from eight to twelve months to find a new job.”

Source: Valor

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