PARIS (Reuters) – French companies have asked to put nearly four million workers on state-subsidised furlough to cope with the collapse in business triggered by the coronavirus outbreak, the Labour Ministry said on Thursday.
The government has seen requests skyrocket since it pledged in mid-March to reimburse companies 80% of net wages paid out to workers who are told not to come in or who have had their hours reduced.
More than 425,000 companies and association had put in requests as of Wednesday to use the scheme to furlough 3.9 million workers with over 2 million in the last week alone, the ministry said.
“That means one out of five French workers in companies or associations are on partial unemployment,” Labour Minister Muriel Penicaud told France Info radio.
After Germany weathered the 2008-2009 economic crisis better than many countries thanks to a similar furlough scheme, France rushed to roll out its own version last month and the government says it now has the most generous programme in Europe.
Finance Minister Bruno Le Maire said on Wednesday that the programme was likely to cost much more than the 8.5 billion euros ($9.24 billion) that had been initially budgeted.
However, he added that it was worth the cost because companies would able to recover more quickly once business came back than if they had laid off workers outright and had to rebuild their workforces.
Economists say that the programme may mean help France avoid a sharp jump in unemployment, which stood at an 11-year low of 8.1% at the end of last year with 2.4 million people registered as jobless.
Nearly two thirds of the workers on furlough are at companies with less than 250 employees with many in retail, restaurant, hotel and construction sectors, the Labour Ministry said.
Workers at companies with more than 1,000 employees made up only 5% of the total number of people on furlough.
(Reporting by Leigh Thomas; Additional reporting by Nicolas Delame and Myriam Rivet; editing by Nick Macfie)