The Number of Companies Planning Reductions in Latvia Has Tripled 0 11

This indicates an increase in competition for jobs over the next year, according to the annual employer survey on labor market trends and forecasts conducted by the online recruitment company Alma Career Latvia. At the same time, the survey shows that 26% of employers in Latvia plan to increase their workforce in 2026; however, companies are increasingly opting for a cautious approach to staffing issues. 23% of companies report that they do not plan to make changes to their team size — overall, this indicates an uneven and fragile balance in the labor market.

Staff reductions are most often associated with company reorganizations, increased operational efficiency, and higher performance demands on employees. This shows that layoffs are not just a short-term reaction to the economic situation but also part of structural changes within companies.

At the same time, for companies planning to hire new employees, the main reason remains growth and an increase in workload. This confirms that the labor market in 2026 will develop unevenly: while some companies are expanding their teams, others will be optimizing their workforce.

Compared to Estonia, the caution of Latvian employers is more pronounced. The results of the employer plans survey show that in Estonia, a significantly smaller share of employers — 7% — plan to reduce their workforce in 2026, while nearly a third, or 30%, intend to increase their staff. This indicates that, although caution is also evident in the neighboring country’s labor market, employers in Estonia view 2026 with significantly more optimism than those in Latvia.

Although nearly half — 47% — of employers plan to raise salaries in 2026, in most cases, this involves moderate growth within the range of 3–6%. The primary goal of salary increases is to retain current employees and mitigate the impact of inflation.

Despite cautious plans, the search for and retention of workers remains one of the biggest challenges: nearly half of employers note that the availability of labor has worsened over the past year.

"The labor market in Latvia in 2026 will not be easy: salaries will grow more slowly, employers will become more cautious, but competition for skilled employees and talent will remain high — just as the struggle for vacancies among the most attractive employers will continue," notes Krista Rozina, Head of Marketing and Communications at Alma Career Latvia. "The increase in the share of employers planning reductions clearly shows that companies are becoming more cautious, carefully assessing costs and efficiency while trying to retain those employees and talents that are critically important for the successful operation of the company."

Overall, employers' plans for 2026 depict a labor market where both growth and optimization are occurring simultaneously, but caution is becoming the dominant sentiment.