Hungarian government reacts to the increase in the number of foreign workers

As reported by Portfolio, the perception that Hungarians are being made redundant while companies are hiring workers from abroad has grown in recent weeks. Data shows that this is not just an anecdotal phenomenon, but the prevailing trend.

Employment in Hungary has hit a two-year low as the weakening economy takes an increasingly heavy toll on the labour market.

With only 4.5 million people now in the domestic primary labour market, lower numbers have only been seen in 2022.

Meanwhile, 105,000 foreigners were already working in Hungary by spring. The increase in the number of workers from third countries gained new momentum at the beginning of the year.

According to a statement by the Economy Ministry,

Hungary belongs to the Hungarians and will not become a country for guest workers or migrants.

Therefore, temporary residence and work in Hungary are only permitted for the purposes, under the conditions and with the title determined by the Hungarian state, and only if the state so decides. The government is protecting Hungarian families and jobs, so the presence of foreigners is always purpose-bound, authorised and time-limited."

1. Is there a correlation between changes in the number of Hungarian workers and changes in the number of third-country nationals?

"There is no causal link whatsoever between the fall in total employment and the number of third-country nationals employed in our country. There is no evidence that a periodic decrease in the number of employed persons is accompanied by an increase in the number of foreigners, either this year or in recent years," says the ministry.

In autumn 2023, the government revised existing legislation on foreigners and drafted a new law to regulate immigration and employment. With this new act (on general rules for the entry and residence of third-country nationals), which came into force on 1 January 2024, the government aimed to ensure that foreign employment is only permitted if it is strictly justified by the national economy, and that it does not come at the expense of the Hungarian workforce.

Under the legislation, a third-country national may reside and work only for the purposes, under the legal title and if the conditions set by the Hungarian state are met, and only if the state so decides.

In all cases, foreign nationals' stays are subject to authorisation and are limited in time.

2. So the number of third-country nationals in Hungary is not increasing?

The number of third-country nationals has essentially stagnated since the end of 2023. This year, it has fallen for four consecutive months, with a 3% decrease between February and June.

KSH data is only available to the public up to April this year. To see stagnation in the number of EU+EFTA citizens working in Hungary, you would need to be slightly generous (and or ignore the data completely), but the increase in the number of workers coming from outside this bloc would be hard to deny. Well, not that hard apparently. When we compare December 2023 with April 2025, we see a 2.7% increase in the number of EU+EFTA citizens, an 8.1% increase in the number of third-country nationals, and an overall increase of 6.9% when we combine these two groups. A comparison with January 2024 gives us increases of 3.7%, 5.7% and 5.3%, respectively. It's a mystery which of these figures can be considered stagnation or decline.

The chart below shows the "four-month consecutive decline" even more clearly.

The number of third-country nationals has fallen in recent months, primarily due to the government's tightening of guest worker employment rules on 1 January 2025, the ministry explained further. According to this, guest workers may only come from a country with which Hungary has a readmission agreement, or from a country that has an officially recognised organisation or agency in Hungary which will ensure that its citizens leave Hungary if they break the law, the ministry added.

A quota regulates the number of guest workers who can be employed in Hungary. According to the ministerial decree, the maximum number of residence permits for guest workers and for employment purposes that can be issued is 65,000 in 2024 and 35,000 in 2025.

"Last year, we did not reach the target number, so this year, we have almost halved it. We are currently on track, having issued less than half of the permits in the first six months of the year so far," they added.

Thus, the number of foreign employees in Hungary remains low. Third-country workers represent 2.8% of the total workforce and foreigners, including those from EU/EEA countries, represent 3%. By comparison, the figures are 4.5% in Slovakia, 7.1% in Poland, and 16% in the Czech Republic.

3. What are the typical activities in which third-country nationals are employed?

The employment of third-country nationals can be divided into three main categories: employment during the investment, commissioning and operational phases. During the investment and commissioning phases, foreign investors prefer to employ professionals from their own country who have the necessary construction, engineering and technological skills to set up and start up a specific plant, for obvious reasons. These phases are of shorter duration.

However, during the long-term operational phase, the aim and the expecation of investors is clearly to employ domestic labour,

the ministry writes.

It is also important to note that a labour market inspections must be carried out before foreigners can be employed in any of the three phases. As part of this evaluation, the relevant government office determines whether the job in question can be filled by Hungarian workers. If so, foreigners cannot be employed for that position.

4. To what extent does the government monitor the regularity of employment by foreign investors?

Ensuring the legal and regular employment of third-country nationals is the responsibility of many public institutions. Labour market and employment inspections are carried out if there is any doubt about the legality of procedures or employment (e.g. preference for foreign workers), the ministry said.

5. Is the number of people employed in Hungary really falling? If so, what are the reasons for this?

"Since 2010, the number of people in work in Hungary has increased by around one million, which is a huge achievement! The last decade was characterised by an extensive phase of economic growth driven by an increase in employment. In the current intensive phase, however, the focus is shifting towards more efficient employment. Here, economic performance is determined by the use of modern technologies, better work organisation and more efficient allocation of labour within sectors, rather than by expansion of the workforce. This is evidenced by a decline in employment in the industrial sector and an increase in employment in services.

"The number of people in employment has indeed fallen somewhat recently, but the decline is clearly due to demographic trends. This is also confirmed by the fact that Hungary's employment level has not declined, and in fact its position in the European Union has improved, where we have moved up to 5th place in the ranking of Member States," the ministry pointed out.

6. Which industries are most affected by this change?

"The biggest shake-up is seen in manufacturing and transport equipment, where employers are not filling vacancies or hiring to replace retiring workers. We have also seen an increase in part-time employment in recent months. Companies are not cutting back; they are responding to natural processes by trying to maintain staffing levels through such solutions," concluded the ministry in its statement.

According to the KSH, the number of employees with foreign citizenship in Hungary increased by 6,800 to 102,200 last year. Fewer people are coming from neighbouring countries, and in some cases, we are seeing a decline, as Hungary is no longer able to offer the same wage advantage it did 10–15 years ago.

The largest number of workers (3,200) came from the Philippines last year, but the number of Vietnamese workers increased almost as much. There were also more workers from India, China, Türkiye and Russia, while the number of Serbian and Romanian workers decreased. As the graph below shows, the number of Ukrainian workers fell the most.

Although the number of Ukrainian workers has fallen the most, they still form the largest group, numbering around 20,000. There are also 9,500 Filipino and 8,700 Vietnamese workers, meaning

there are now more Filipinos and Vietnamese working in Hungary than people from Slovakia or Romania.

The data indicate that the Hungarian labour market is now more attractive to workers from third countries than to those from neighbouring countries. In fact, there are now more people from certain Far Eastern countries than from the region itself.

Earlier this week, Telex reported that China's CATL had suspended the dismissal of Hungarian workers, partly due to the announced inspections by the authorities. Six current and former employees of the battery factory in Debrecen told the news portal that the company's management had stopped the layoffs that were due to take place by 15 July. According to three separate sources, CATL management held a crisis meeting late on Thursday afternoon, at which point the layoffs were suspended indefinitely due to negative press coverage and anticipated regulatory investigations.

Cover image (for illustration purposes only): Getty Images