Statistics Estonia’s latest figures show a modest quarterly drop in unemployment, but the Estonian Unemployment Insurance Fund (EUIF) warns the decline is largely seasonal, and the broader job market remains challenging.
Based on survey data from Statistics Estonia, the unemployment rate stood at 7.8 percent in the second quarter of 2025 — down 0.8 percentage points from the first quarter but slightly up from 7.6 percent a year earlier.
“Long-term stagnation has set in, and unemployment indicators have edged up slightly,” said Lenno Uusküla, chief economist at Luminor.
He added that many employers are keeping staff on payroll despite reduced workloads, betting demand will rebound.
The EUIF reported a modest drop in registered unemployment compared with both the first quarter and the same period last year.
Katrin Liivamets, head of employer services at the agency, said seasonal work in tourism and agriculture provides extra employment opportunities, drawing more people into the labor market.
However, some employers are still forced to cut jobs.
Estonian Cell, a bleached pulp mill that has run at significant losses over the past two fiscal years, is preparing to slash its workforce by about a quarter.
Board member Meelis Kuzma said the company has survived only thanks to additional investor funding.
“We’ve now reached the point where the owner is unwilling to inject more capital, so we’re undertaking a major reorganization and cost-cutting program, cutting production capacity by 40 percent and reducing shifts from four to three,” Kuzma explained.
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