One third of digital companies in Europe are expecting layoffs because of COVID-19 – survey

• Three-quarters of digital companies are expecting a negative financial impact

• 93% believe pandemic will lead to a global recession; supply chains have been disrupted, particularly in China (86% of the value chain) and Europe (74%)

• 82% of all employees can work from home

• Half of digital businesses in Europe believe governments are not doing enough

• Government salary support and tax postponement most popular national measures, while two thirds back the launch of fast-track ICT tenders

• At EU level, 90% back a stimulus package focused on digital transformation, 86% support launching additional projects and tenders

DIGITALEUROPE, in collaboration with 14 national trade associations from across Europe, conducted a survey of 634 digital businesses of all sizes between 17 March and 16 April 2020.

This survey complements our 26 short-, medium- and long-term recommendations for the EU institutions on COVID-19 that we published last week.

Director-General of DIGITALEUROPE, Cecilia Bonefeld-Dahl, said

“We welcome the measures taken so far to deal with this unprecedented crisis, such as increased flexibility on state aid rules at the EU level and employee salary support at the national level. But our survey shows that our members need more action, for example on fast-track ICT tenders and greater digital investment.

As a sector, we are resilient. A large majority has pivoted to working from home relatively easily. Nevertheless, it is distressing to see that one third of digital companies are expecting layoffs. Thousands of Europeans are losing good quality, well-paying jobs in the digital sector and potential unicorns are facing bankruptcy. Europe’s digital ecosystem and its power to innovate in the future is at risk.

At national level, the needs of digital SMEs are not unlike other sectors in need of short-term liquidity. Additionally, governments could boost our recovery by increasing the amount of ICT tenders that can be delivered remotely. If public authorities were thinking of upgrading their digital infrastructure, now is the time to do it!

At EU level, this survey supports the recommendations we published last week: we need to raise awareness of EU funding mechanisms through a one stop shop for SMEs with practical information. Digitalisation must also be at heart of the EU recovery and reinvention as lockdowns ease – to revive our sector but also to transform other sectors. Keeping the focus on green and digital investments in Europe will be key to our future financial stability, competitiveness, and crisis resilience.”