More than 32,000 employing companies closed their doors in 2020, research shows

Brazil recorded a positive balance in the opening of companies in the first year of the Covid-19 pandemic. However, the phenomenon occurred exclusively in the modality without any salaried worker, that is, there was only the owner or partners.

At the same time, 32,467 employing companies of all sizes were closed, including micro, small or large companies, which resulted in the dismissal of more than 825,000 employees.

The data are from the Central Register of Companies (Cempre) for 2020 and released this Thursday (23) by the Brazilian Institute of Geography and Statistics (IBGE).

The number of active companies and formal organizations increased from 5.239 million in 2019 to 5.434 million in 2020, an increase of 3.7%, equivalent to 194,842 more deals.

The result, however, is explained by an 8.6% jump in the number of organizations without any salaried workers: 227,309 more companies in just one year.

The data suggest that the movement is explained by necessity entrepreneurship, a greater creation of CNPJs by laid-off workers who were trying to open their own business or who sought to compensate for a loss of income caused by the health crisis.

“Either to maintain income, or they were fired and opened their own businesses out of necessity”, confirmed Thiego Gonçalves Ferreira, manager of the IBGE survey. “There was a positive balance in (companies) not employers.”

On the other hand, the number of companies and organizations with at least one person employed showed a general decrease. In companies with 1 to 9 employees, the decline was 0.4% in the number of companies, 8,233 less. In the range between 10 and 49 salaried employees, 22,514 companies were closed in one year, a drop of 5.3% in the total number of employers.

The group that hired between 50 and 249 people accounted for 1,529 fewer establishments, a decline of 2.3% in this universe in one year. Among large companies, with at least 250 employees, 191 companies closed their doors, a drop of 1% in the total number of companies of this size.

Reduction in salaried employment

As of December 31, 2020, companies and formal organizations active in the country employed 52.697 million people, of which 45.390 million were salaried employees and 7.307 million were partners or owners.

The employed labor force decreased by 1.0%, around 523.5 thousand people less: 825.280 thousand salaried workers lost their jobs in 2020, a drop of 1.8% in the total number of workers in this condition compared to 2019, while 378.976 thousand people were more became partners or owners, an increase of 11.3% in this contingent in just one year.

The IBGE points out that, despite the pandemic, the reduction in salaried personnel was not the sharpest in the historical series in relative terms. Labor downsizing was higher in 2015 (-3.6%) and 2016 (-4.4%), amid the economic recession.

The institute recalls that, in 2020, emergency government programs helped to avoid a greater layoff of employees: the Employment and Income Maintenance Program, which would have benefited 9.8 million workers; Emergency Aid helping to maintain or increase consumption by beneficiaries; and the National Support Program for Micro and Small Businesses (Pronampe), with the release of R$ 37.5 billion in financing to 517 thousand companies, according to official data.

Women hardest hit by layoffs

However, among the effective dismissals, women were significantly more affected. For every ten salaried workers laid off in the year, at least seven were women.

In 2020, the number of men working as salaried workers fell by 0.9%, while that of women fell by 2.9%. Of the more than 825,000 of these jobs lost in relation to 2019, about 593,600 (or 71.9%) were occupied by women.

As a result, there was a worsening in the advancement of female participation in the labor market for the first time in the historical series started in 2009.

The proportion of women among employees in the country’s formal companies fell from 44.8% in 2019 to 44.3% in 2020.

In 2009, when these data began to be collected, women represented 41.9% of the salaried workforce in the formal sector.

“It reduced the participation (of women) in the formal job market there to the level of 2016”, said Ferreira. “We attribute it to two major factors. First, there was an increase in wage earners in sectors that employ more men, such as construction. At the same time, we observed a reduction in those sectors that most employ women, which was accommodation and food, education”, she added.

The IBGE researcher also points out that activities such as the manufacturing industry and retail trade had a greater loss of employees in segments with a greater presence of female workers, such as clothing, accessories and footwear.

“It is directly related to the very characteristic of the pandemic, these sectors were not essential activities, and even the historical issue of women having to be more present at home”, exemplified Ferreira.

Layoffs of employees were more severe in the segments of accommodation and food (-373.2 thousand workers), public administration, defense and social security (-233.9 thousand) and commerce (-221.7 thousand). The most significant increases occurred in human health and social services (139.3 thousand more) and construction (80.8 thousand more).

In relative terms, the sector with the biggest cut in salaried jobs was accommodation and food, with a record drop of 19.4%, followed by the arts, culture, sports and recreation segment, with an also historic drop of 16.4%.

The average salary paid by companies in the country fell to R$ 3,043.81 in 2020, or 2.9 minimum wages, 3.0% less than in 2019. The salary mass shrank to R$ 1.806 trillion, a drop of 6, 0% compared to 2019, the highest in the survey’s historical series.

Exporters and Importers

The first year of the new coronavirus pandemic, 2020, was marked by an increase in the number of exporting companies in the country, but a reduction in importing companies, according to data from Cempre, informed the IBGE.

Brazil had 23,632 exporting companies in 2020, which represented 0.4% of the total number of organizations active in the country. The amount represented an increase of 3.4% in relation to the amount of existing companies in 2019.

At the same time, there were 33,495 importing companies in 2020, accounting for a share of 0.6% of active organizations, after a fall of 13.4% in relation to the universe of active companies in 2019.

“Exporting companies grew by 3.4%. On the other hand, importers felt the effects of the pandemic much more, they fell by more than 13%”, stressed Thiego Gonçalves Ferreira.

Exporting companies employed 5.074 million wage earners in 2020, equivalent to 11.2% of the total employed wage earners in that year. There was a 2.1% increase in the number of vacancies compared to 2019.

Importing companies, on the other hand, accounted for 8.140 million salaried workers, 17.9% of the total employed in this condition, despite the 1.3% reduction in the number of employees in one year.

“It’s a small share of the number of companies, but they employ a lot of people”, noted Ferreira.

According to the research, a company can be both an exporter and an importer.