Short-time Work Can Make Restructurings More Difficult

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Since the beginning of the Covid 19 pandemic, short-time work has experienced an unparalleled renaissance, not least due to the campaigning of the German government. For numerous companies that were affected by the crisis, short-time work was often the means of choice to reduce personnel costs. The Federal Cabinet has now decided to extend the facilitations for short-time work introduced in response to the pandemic.

In practice, however, the following question is being asked more often: what happens if short-time work is not enough to stabilise the company in the long term? The longer the crisis lasts, the more urgent it becomes for companies to deal with how to navigate the business in the future.

Dr. Thomas Gennert explains the possible effects of short-time work and why this political instrument can even make restructurings more difficult.