Covid-19: half of French startups partially unemployed during the crisis

by bold-lichterman

The Covid-19 epidemic and its economic consequences have not spared startups which have massively used state aid schemes, including partial unemployment for half of them, according to a study published Tuesday in upstream of the France Digitale summit. “In this exceptional context, startups have greatly benefited from the measures proposed by the government ”: 52% of them have implemented partial unemployment measures during confinement and 83% have benefited from a PGE (loan guaranteed by the State), according to the EY firm’s annual barometer on economic and social performance digital startups in France, which surveyed some 500 companies.

Among them, 30% say they have encountered financial difficulties during confinement. They are also almost a quarter to expect no growth in 2020, compared to 5% before the health crisis, and 61% of them said they were reconsidering their recruitment intentions in the coming months.

“Young Innovative Company”

At the same time, financing rounds with investors were rather postponed than canceled, note the authors of the study. The indicators were however green at the start of the year. The turnover of the startups surveyed had increased by 23% in 2019 (a third of this being carried out abroad), the workforce had increased by 28% over the period and recruitment difficulties were the major obstacle Development.

These have now taken a back seat, overtaken by the lack of demand and the difficulties in getting large companies to pay. The startups had also already had recourse to State aid measures before the crisis: 60% of them using the research tax credit, 50% the innovation tax credit and 42% benefiting from the status of “Young Innovative Company” which allows certain tax exemptions.