Europe, Tech and War

“When firing is costly, as it is in most of Europe, employers are reluctant to invest in risky ventures,” says Olivier Coste, a former EU official turned tech entrepreneur. Alongside Yann Coatanlem, another entrepreneur and economist, they have tracked the (often opaque) costs of corporate restructurings. An American firm shedding workers will incur costs equivalent to paying those sacked for seven months and be done with it. In Germany costs amount to 31 months of wages for each employee let go; in France 38 months. Beyond severance pay and sops to keep unions happy, the biggest expense is firms keeping unproductive workers on their books they would rather be rid of. New investments are delayed for years as dismissed employees are gradually replaced. American firms quickly pivot to new moon-shot opportunities; Europeans ones are stuck in the same old mire as they haggle with unions, due often to laws devised nearly a century ago.

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