French President Emmanuel Macron is facing rising unemployment rates, with concerns this could affect his reputation as an economic reformer. Over the past year, joblessness has increased, with the unemployment rate at 7.5% in the last quarter, up from 7.1% a year prior. The outlook is unclear as businesses in various sectors, from finance to retail, prepare for layoffs. Macron’s concern is that more job cuts could negatively influence public perception of his employment record ahead of the European Parliament elections in June. His economic reforms, including loosening labor laws and advocating for delayed retirement, are being questioned due to the increased support for opposition party, Marine Le Pen’s National Rally.

Notably, sectors like finance and construction in France are facing significant layoffs. Societe Generale SA has announced plans to cut 900 jobs, while Worldine SA is preparing to lay off nearly 8% of its global workforce. The construction sector is observing the impact of the European Central Bank’s interest rate hikes on the housing market. Vinci SA has initiated discussions regarding voluntary help fundancies. Further, France’s federation of real estate developers estimates a reduction in building projects will equate to roughly 300,000 fewer jobs in the following two years.

The retail sector is also affected with the clothing chain IKKS announcing plans to cut approximately 200 jobs and close 77 shops. Macron’s response so far has been to promise another phase of the economic reforms that characterized his early presidency. Nonetheless, these proposed changes, such as reducing bureaucracy for small companies and further amendments to discourage reliance on unemployment benefits, risk antagonizing unions. Despite protests and strikes against raising the retirement age last year, Macron may have limited options if he is to proceed with his planned reforms.

Overall, Macron is aiming for a potential reduction in the unemployment rate to 5% by 2030, according to Bank of France Governor Francois Villeroy de Galhau. Villeroy stated that with additional reforms aimed at enhancing training, apprenticeships, and education, France could still achieve full employment this decade.