Larger firms expect to cut jobs as unemployment rises
By Rob Freeman | 16th July 2020
Nearly a third of businesses expect to announce job losses over the next three months - as figures show 2.6 million people are claiming work-related benefits.
Research by the British Chambers of Commerce said 29 per cent of businesses in the UK were planning cuts over the next three months.
It is the highest figure since the lobby group started the survey, which encompassed 7,400 firms, in 1989.
The survey - carried out before Chancellor Rishi Sunak's summer statement - said firms with more than 250 employees were the most likely to make cuts.
The research come as the latest figures from the Office for National Statistics showed there were 649,000 fewer people on the payroll in June than the start of the lockdown in March.
Total weekly hours worked fell by a record 175.3 million hours (16.7 per cent) to 877.1 million - a measure which analysts say is an accurate reflection due to the effects of the furlough scheme on the employment market.
The BCC has called on the Chancellor to take further action as the job retention scheme begins to be phased out, including a temporary cut in employer National Insurance contributions and more funding for training.
Co-executive director Hannah Essex said: "Many businesses are suffering from an historic cash crunch and reduced demand, meaning firms will still face tough decisions despite welcome interventions made in the summer statement."
The survey also found 28 per cent had decreased the size of their workforce during the period covered with 66 per cent saying they had kept their workforce constant by furloughing employees.
Eighteen per cent of firms with fewer than 10 employees expected their workforce to decrease, a figure which rose to 41 per cent for those employing between 10 and 250 people.
Business West's Gloucestershire director Ian Mean fears the picture in the county could be worse.
He said: "In Gloucestershire we have 76,500 people on the furlough scheme with a worrying prediction by those in the recruitment field that up to 40 per cent of those could lose their jobs as the scheme closes down by the end of October.
"I am afraid that many people in hospitality will become jobless.
"And, of course, perhaps the biggest losers in this Covid-19 employment world will be our young people - school, college and university leavers."
He continued: "Added to that jobless group will be young people who have been working in hospitality who are work ready.
"I believe Rishi Sunak will have to dish up some more company support in his September Budget if surveys like this are not going to get a lot more scary and a lot more realistic."
Fears for unemployment among young people was backed up by the ONS figures which also revealed the difficulties of finding a new job.
An ONS spokesman said: "The estimated number of people unemployed aged 16 to 24 years increased by 47,000 on the year while other age groups remained steady.
"Vacancies in the UK in April to June are at the lowest level since the survey began in April to June 2001, at an estimated 333,000 - 23 per cent lower than the previous record low in 2009."
Matthew Percival, the CBI's director for people and skills, said: "These figures show serious difficulties for hundreds of thousands of people, but unfortunately this is still only the beginning of the impact on the labour market.
"Flattening the unemployment curve will remain paramount."
Copyright 2020 Moose Partnership Ltd. All rights reserved. Reproduction of any content is strictly forbidden without prior permission.