Employment

Over 100,000 to be made redundant during crisis – with more cuts on the way

With the UK in its deepest recession on record, the country's labour market is reaching crisis point

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The Covid-19 crisis is hitting the UK labour market hard. The country has plunged into its deepest recession on record, and despite more than tens of thousands of redundancies being on the cards so far, there are fears that the picture is set to get worse for UK workers.

Lockdown on March 23 shut shops, cafes and non-essential retail, meaning businesses lost entire incomes overnight. As a result, Britain’s economic downturn is the worst of any G7 country and the most significant decline in the EU. The Office for National Statistics estimated that between April and June this year, there were 4.8 redundancies per every 1,000 workers.

ONS analysis also revealed that GDP fell by 20.4 per cent – more than a fifth, and double the drop seen in the US during the same period – over the last quarter. The researchers found that around 730,000 jobs were lost from company payrolls since March. Not all of these can be classed as unemployed because they were not actively looking for work, experts said, forcing a major shift in the labour market during the pandemic.

The government’s job retention scheme has gone some way to protecting workers and allowing businesses to keep staff on the books while closed. Nearly 9.4m people have been furloughed to date since the country locked down, but – despite countries like Germany extending their own furlough systems to 24 months – the scheme is set to end in October. There are concerns this will lead to an unprecedented wave of redundancies when companies find they’re unable to hold onto staff without government money coming in. It’s thought that as many as two million jobs could be lost.

It’s a particular worry for industries which struggle to operate within social distancing measures even once allowed to reopen. And for the sectors particularly impacted by Covid-19 restrictions, like hospitality and aviation, the picture is bleak. The Office for Budget Responsibility said that at least 10 per cent of workers currently furloughed will face permanent redundancy when the scheme ends.

A number of the UK’s biggest companies have already announced mass redundancies or predicted huge job cuts for the months ahead.

The International Air Transport Association said passenger numbers in May were down 99 per cent on the previous year. This followed reports of a massive 12,000 job loss with British Airways in April.

Later, Virgin Atlantic announced that it would cut 3,150 jobs and pull out of Gatwick Airport entirely; Ryanair said it would be reducing its staffing by 3,000; and EasyJet released plans to make 4,500 workers redundant.

In June, Swissport said it would axe 4,556 jobs, nearly half its UK workforce, and Aer Lingus warned of 900 redundancies.

The companies building the planes have been just as badly hit. Rolls-Royce will cut 9,000 jobs, 3,000 of those in the UK, while Airbus is set to lose 1,700 workers in the country.

And at Heathrow Airport, around 500 jobs have already been cut – with voluntary redundancy now open to workers, with a third of its 7,000 staff facing unemployment.

The crisis has been just as devastating for tourism. Travel company TUI announced 8,000 redundancies around the world in May.

The outlook is no better for workers in hospitality and retail.

Marks & Spencer will cut 7,000 positions on top of the 950 managerial roles already announced. Elsewhere 1,300 people are expected to lose their jobs at department store giant John Lewis and 6,500 could go at Debenhams.

545 jobs are set to be lost within Monsoon Accessorize, with well-known shoe retailer Clarks looking to cut 900 workers.

Oasis and Warehouse will lose 1,800 roles from across the stories, while 470 staff are at risk at fashion brand Mulberry. High street drugstore Boots will slash 4,000 roles.

The Restaurant Group is set to lose 1,500 workers from its Frankie & Benny’s, Chiquito and Wagamama restaurants and will permanently close 125 establishments, threatening 3,000 jobs. Meanwhile Burger King is warning as many as 1,600 jobs could be lost if the fast food chain is forced to close up to 10 per cent of its stores as predicted. Up to 1,100 people could lose their jobs at Pizza Express.

SSP, the company in ownership of train station staple Upper Crust, has been uniquely hit due to its intersection between travel and hospitality, expecting to lose 5,000 jobs.

And Pret A Manger is looking at closing 30 stores now that its usual office worker clientele is working from home, risking 1,000 jobs.

The UK’s banks are being hit hard too. HSBC  expects to lose 35,000 jobs around the world, including in the UK, while TSB cashiers have been told up to 929 of them could soon be unemployed. Around 800 positions could be lost from Natwest according to current plans.

And in oil, BP plans to make 10,000 people redundant worldwide, working out at around 2,000 in the UK.

This works out at around 100,000 UK redundancies announced so far during the crisis. More companies are announcing redundancy consultation plans by the week. The Big Issue will continue maintaining this page to make the picture clear.

The Ride Out Recession Alliance is working to come up with a safety net for those at risk of losing their jobs as a result of the pandemic. Together with member organisations like Shelter we’re working to keep people in work and prevent renters losing their homes – the financial cliff-edge presented by the August 23 eviction ban puts thousands at risk of homelessness. Find out more here.

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