Amid a multi-faceted crisis caused by the depreciation of the euro and declining foreign demand, Albania’s textile and footwear factories have cut nearly one-fifth of their workforce over the past year.
According to official data from INSTAT, the employment index in textile factories saw a drop of over 19 percentage points in Q4 2024 compared to the same period in 2023. In the footwear sector, the employment index fell by over 7 percentage points during the same timeframe.
Economic data on enterprises reported by INSTAT indicate that in 2023, the average number of salaried employees in clothing factories stood at 28,250, while footwear factories employed 20,080 workers.
Job Cuts Persist in Early 2025 Market sources confirm that workforce reductions continued into January and February 2025, as many factories completed annual contracts or ceased operations altogether.
The decline in employment in the apparel sector has now entered its third consecutive year in 2025. The fall in the euro’s value from 122.4 lek per euro in 2021 to below 100 lek in 2024 has led to significant financial losses for businesses.
Additionally, the industry faced a sharp drop in demand from export markets, driven by the relocation of production outside Europe and a decrease in consumer spending on apparel and footwear in developed countries.
Recent data suggests a slight improvement in footwear orders as of February 2025, but the apparel sector remains fragile. The revival of footwear factories has proven challenging since many former workers have transitioned to other industries, making their return to factory jobs difficult.
Industry Struggles to Adapt The Albanian-made textile and footwear industry has emerged severely weakened by the euro crisis and declining demand, making it increasingly difficult to meet new orders.
Most laid-off factory workers have been reintegrated into the service sector, particularly in cleaning jobs. The rising demand for cleaning staff in hotels and Airbnb units has contributed to this workforce shift.
The labor market has undergone a structural transformation, moving away from manufacturing toward services. However, despite this shift, almost all sectors except industry are struggling with labor shortages.
In contrast, employment indices surged last year in sectors such as software development, travel agencies, hotels, information, and communication.