Up to 30% of UK firms see job cuts as Covid-19 support winds down
Up to third of UK employers expect to axe jobs between July and October, according to a new survey, indicating the number of workers under threat from the coronavirus impact is rising.
Around 33% of more than 2,000 companies, charities and public sector bodies surveyed were planning redundancies in the third quarter, said the Chartered Institute of Personnel and Development (CIPD) and recruitment firm Adecco.
Jobs are under threat as the government starts to withdraw the coronavirus job retention scheme which has seen workers furloughed on 80% of wages capped at £2,500 per month.
Employers have this month been forced to start contributing towards the wage bill, and the scheme is scheduled to close at the end of October.
“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,” said Gerwyn Davies, CIPD labour market analyst.
“Recruitment intentions have improved modestly since the spring quarter. However, they continue to lag well below the levels seen in previous years. As in the spring report, labour demand in the public sector appears to be only offsetting in part relatively weak demand in the private sector,.
He added that economic uncertainty would continue to weigh down pay, with the survey showing basic pay expectations among employers for the 12 months to June 2021 at a record low of 1%.
“This is partly due to a relatively large proportion of private sector employers that plan to introduce wage freezes during the same period. And many others are unsure of their future intentions,” he said.