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The shoe sector is facing a widening challenge as producers begin to reassess staffing in response to a sustained drop in demand across major markets. A slow decline in consumption in Europe continues to press on local firms, forcing many to consider adjustments to the workforce to cope with reduced income. The Labor Inspectorate has tightened the use of temporary and permanent contracts, giving employers more flexibility during this period of volatility. This shift may push companies to rely on employment arrangement files, whether permanent or temporary, as the market tightens.
The Valencian Shoe Entrepreneurs Association, Avecal, warns about these pressures. They have already noted an uptick in individual layoffs in several factories and a rise in questions related to employment regimes such as ERE and ERTE, according to José María Escrigas, legal advisor for the association.
On the market side, after a strong orders rebound in the previous two years, Valencian exports of footwear have fallen 4.2 percent so far this year, with a longer downward trend evident overall. After early positives, figures entered negative territory from April onward, and recent months have seen sales decline surpassing 20 percent, according to ICEX data. A worker at a shoe factory in Elda, photographed by Axel Alvarez, bears witness to the sector’s ongoing pressures.
The national market shares the same unsettling trend. Production in the Valencian Community fell by 17.8 percent through October, according to the Generalitat Statistics Portal, underscoring a broad regional contraction.
There are few signs of a near-term recovery. The decline in consumption means customers will reach the new season with larger stockpiles, which logically translates into smaller orders for the coming year, says Marian Cano, president of Avecal. This sets the stage for continued reductions in production.
Shaping labor strategies amid uncertainty
Faced with mounting pressures, manufacturers are running the numbers and viewing workforce adjustments as likely. At the start of the year many faced a period of obscurity, with a majority of workers on recurring or irregular schedules. The change has been aligned with guidance from the Labor Inspectorate, which has made certain adjustments mandatory for all sector employees who worked at least 87.5 percent of a standard day in previous years, despite objections from employers who had anticipated some exceptional circumstances during epidemics. This ongoing shakeout has created a flexible yet precarious labor environment for the sector, with peaks tied to seasonal fluctuations that require nimble responsiveness.
The sector has historically operated with multiple collections throughout the year, not simply two seasonal lines. If this reality is ignored, the industry risks treating production as a temporary cycle rather than a permanent activity, a distinction that the labor discussions continue to stress.
In response to the cycle shift, some companies have explored solutions based on Article Four of the national shoe convention in search of non-traumatic options for staffing. Among these, the possibility of transitioning some workers to temporary permanent positions as volunteers has been raised. Nevertheless, the Labor Inspectorate has shown strong resistance to early pilot cases, leaving manufacturers with limited alternatives and continuing to rely on established methods whenever feasible.
Avecal’s leadership stresses that the industry needs a distinct tempo and ongoing flexibility to adapt to fluctuations. The executive notes the anxiety pervading the sector and acknowledges that the only clear path left for many employers is to resort to ERE or ERTE in some form. This situation hurts both workers, who lose stability and skill continuity, and producers, who face higher turnover costs and scattered expertise.
Exports slow as consumption cools in Europe and the United States
The employer’s legal counsel points to ongoing, albeit modest, layoffs and a wave of inquiries about potential staff cuts reaching the main offices across the region. Across the Valencian Community, about 1,948 companies in the footwear sector employ nearly 18,000 workers, highlighting the broad impact of the current market conditions. This snapshot from recent months reflects a region-wide struggle as demand remains constrained and production scales back.
Source notes compile these observations from industry and government data, including ICEX and Generalitat portals, illustrating a difficult but not hopeless period for Valencian footwear manufacturing. The industry continues to navigate a volatile environment, balancing the need for flexibility with the imperative to preserve skills and employment where possible. The current climate emphasizes the importance of strategic planning and proactive workforce management to weather the downturn and position the sector for a measurable recovery when demand improves. These dynamics shape the outlook for both producers and workers as markets gradually stabilize and markets in North America and Europe recalibrate.
The situation remains fluid, with policy, market demand, and labor practices converging to determine the near-term course for Valencian footwear manufacturers. As firms adjust, the focus will be on maintaining productive capacity while safeguarding the stability and expertise essential to long-term competitiveness. In this uncertain landscape, collaboration among industry groups, labor authorities, and employers will be crucial to navigate the upcoming seasons successfully.