Morocco Braces for Wave of Layoffs as Covid-19 Cripples Economy

In early April 2020, about 142,000 companies reported to the HCP that they had permanently or temporarily ceased their activities. 89% were in suspension in the accommodation and catering sectors. This is followed by textiles and leather, then metal and mechanical industries; in real estate, 60% of companies have ceased operations.

Business leaders are increasingly concerned about these times of economic gloom due to the coronavirus pandemic, and many employees fear the massive use of economic layoffs, seen as the corridor that will send them into precariousness.

Bankers are already opting for mass layoffs with reasons such as what a legal manager of a large bank calls "the non-achievement of a employee’s production targets or the loss of employability".

According to L’Economiste, the forecasts for the banking sector are the gloomiest with the mountain of non-performing loans: 77 billion DH at the end of July 2020. Unpaid business loans amount to 44 billion DH. The central bank fears an increase in unpaid debts. "Morocco sees its risk rating revised. It goes from low risk to moderate risk".

Thus, some legal practitioners, in view of the strong demand for consultations on the opportunity and financial cost of mass layoffs, announce a great season of collective procedures, according to the same source.

Faced with this gloomy picture, the employers’ association pleads for the flexibility of the labor code with "the reduction of the wage bill to save the company".