This paper examines labor market reaction to the financial and economic crisis of 2008-2010. Main focus of research is the basic parameters of labor market - employment and unemployment, as well as labor force migration and wages. The dynamics of these parameters vary widely from country to country. The authors of this research strive to understand the reasons of this phenomenon. In addition to economic factors they examine the role of two key players in the labor market - government and business. These institutions, to a certain extent, were successful in containing the rise of open unemployment and partially retaining employees in their working places. The role of these institutions has become particularly important in overcoming recession. A special chapter is dedicated to the fate of the new labor market model which was developed in pre-crisis period in some European countries. This model grants the mixture of high level of social protection and labor flexibility. It was put to test during the crisis. The study is recommended for those people who are interested in social and economic implications of the 2008 - 2010 crisis.