Collective Dismissals in Portugal Rise by Over 30%, Lisbon Region Most Affected
The number of workers in Portugal involved in collective dismissal proceedings increased by 30.3% in the first seven months of the year, totaling 4,688 individuals, according to an analysis of official data. The report, based on figures from the Directorate-General for Employment and Labour Relations (DGERT) and compiled by the Lusa news agency, highlights a significant upward trend in layoffs that has been accelerating since 2022.
The data was sourced directly from DGERT's official monthly reports, which track labor market dynamics across the country. The methodology involves compiling the number of collective dismissal procedures communicated to the Ministry of Labour, Employment, and Social Security. These figures show that of the nearly 4,700 workers affected through July, 4,578 were effectively dismissed from their positions, confirming the severity of the trend.
Specifically, the number of workers impacted in the first seven months of 2025 is more than double the 2,140 recorded in the same period of 2023. The number of companies initiating these procedures also saw a notable increase, rising 13.3% year-over-year to 332. This represents the highest number of company-initiated collective dismissals for this period since 2020, a year marked by the initial economic shock of the global pandemic.
A geographic breakdown of the data reveals a heavy concentration of job losses in the country's economic centers. The Lisbon and Tagus Valley region registered the highest number of dismissal procedures, with 166 companies involved, followed by the North with 100. The month of July was particularly stark, with 781 workers being laid off, a substantial increase from the 465 in July 2024. Of those dismissed in July 2025, the Lisbon and Tagus Valley region accounted for an overwhelming 81% of the total, with 633 workers losing their jobs.
A year-over-year comparison shows a consistent increase in these figures. The 4,688 workers affected up to July 2025 is a sharp rise from the 3,598 in the same period of 2024 and the 2,140 in 2023. This sustained increase points to persistent economic pressures on Portuguese businesses. The primary reason cited for the dismissals was the need for 'staff reduction,' which accounted for 53% of the cases, indicating that companies are restructuring or downsizing in response to challenging market conditions.
An analysis by market segment shows that small and micro-enterprises were most likely to resort to collective dismissals, representing 38.6% and 36.1% of the total procedures, respectively. This suggests that smaller economic units are struggling to maintain their workforce amidst the current economic climate. The sectors most impacted in July were the manufacturing industries and the professional services category, which includes consulting, scientific, and technical activities.
A representative from a national business association commented on the findings, stating, 'The data reflects the ongoing challenges faced by many companies, particularly smaller enterprises, which are more vulnerable to market fluctuations and rising operational costs. The concentration in Lisbon is concerning as it is the primary engine of the national economy.' The government has yet to issue a formal response to the latest DGERT statistics, though labor unions have already expressed alarm.
Historically, Portugal has experienced fluctuations in its labor market, but the sharp, sustained increase over the past two years is a point of concern for economists. The current figures are approaching levels not seen since the sovereign debt crisis, although the underlying economic context is different. The Ministry of Labour is expected to analyze the data further to understand the root causes and consider potential policy responses to support both businesses and affected workers.
Future reports from DGERT will be closely watched to determine if this trend continues into the latter half of the year. The next set of comprehensive data is expected to be released in early October, covering the month of August. These forthcoming statistics will provide further insight into the health of the Portuguese labor market and its potential implications for the broader economy. Stay informed on Lisbon property market developments at realestate-lisbon.com.
