In Depth

‘Sombre autumn’: third of UK firms expect to make redundancies by October

Chancellor Rishi Sunak warns of hardship ahead when furlough scheme ends

A new survey has found that up to a third of UK companies expect to make redundancies by October, when the government’s job retention scheme ends.

According to the Chartered Institute of Personnel and Development (CIPD) and recruitment group Adecco, the poll of 2,000 companies, charities and public sector bodies revealed that 33% could make job cuts in the third quarter of the year. 

In the private sector, 38% of firms plan to make redundancies, compared to 16% in the public sector. Personnel Today says this is a 50% increase in the number of employers expecting to cut jobs compared to three months ago, when 22% of employers anticipated redundancies.

CIPD adviser Gerwyn Davies is predicting a “sombre autumn for jobs”, BBC News reports. He said: “This is the weakest set of data we’ve seen for several years. Until now, redundancies have been low - no doubt due to the job retention scheme - but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes. 

“Hiring confidence is rising tentatively, but this probably won’t be enough to offset the rise in redundancies and the number of new graduates and school leavers entering the labour market over the next few months.”

Last week it was reported that 135,000 jobs in Britain were facing the axe amid an “economic armageddon”. Analysis by the Daily Mail revealed that 22,500 job cuts are in the retail sector, 21,600 in travel and airlines, and 18,100 in restaurants.

Sky News says there has already been at least 106,000 job cuts at major businesses since the UK lockdown began on 23 March.

‘Reshaping for the future’

While 33% of employers said they will reduce numbers, almost half (49%) expect to recruit new staff in the next three months, the CIPD-Adecco survey has found. 

Alex Fleming, country head and president of staffing and solutions at Adecco Group UK and Ireland, said: “Redundancy intentions have increased by 11% compared to the previous quarter but, more positively, nearly half of UK employers are planning to recruit over the next three months, which could be an indication that businesses are reshaping for the future.

“As organisations continue transitioning into the new era of work, there will be ongoing shifts in working patterns not only for employees but also for those who are just starting out in their career. 

“Therefore, businesses must demonstrate resilience and adopt new approaches to closing the skills gap by investing in upskilling and reskilling workforces. Creating a positive workplace culture is also integral to maintaining focus, engagement and motivation among existing employees.”

Sunak: tough times ahead

Chancellor Rishi Sunak has warned there will be “hardship ahead” for many people as the UK’s furlough scheme comes to an end

In an interview with Sky News Sunak admitted that ending the job retention scheme was “one of the most difficult decisions” he’s had to make. 

He said: “If you look at it from start to finish, the government will have been stepping in to help pay people’s wages for almost eight months - an extraordinarily long period of time. 

“I think most reasonable people would look at that and say that’s not something that’s obviously sustainable in the long run. 

“In common with many other countries around the world - their versions of this are all coming to the end towards the end of this year.” 

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