Employers in the UK planned an astonishing 300,000 job cuts in June and July, a Freedom of Information (FoI) request from the BBC has found.
More than 1,700 firms planned to make 150,000 job losses in July alone, which represents a seven-fold increase from the same month last year. Meanwhile, in June 1,888 firms planned to slash 156,000 jobs in June – a six-fold increase from June 2019.
The latest figures point to yet more evidence of a coming wave of job losses as the government plans to end its furlough scheme, where the state covers 80 per cent of wages for people who cannot work, on November 1.
The big name employers who made job cut plans in July include Boots, John Lewis, Marks & Spencer, Zizzi owner Azzurri, and furniture retailer DFS.
By law, any firm planning to make more than 20 job cuts must inform the government about how many redundancies they plan to make – meaning planned job cuts could be much higher than the 300,000 figure reported because those companies planning on making fewer than 20 people redundant don’t have to declare their intentions.
Speaking to the BBC, Resolution Foundation senior economist Nye Cominette said, “The reason this data is so useful is that all our other official data is coming through with a time lag.
“This puts policy makers in a really challenging situation,” he added. “The main government support schemes are coming to an end, but in terms of the official data, we still don’t know how big the jobs crisis is, or where we’re heading as we move into the autumn.”
Earlier this month, a survey revealed that one in three employers plan to make job cuts between July and September – up 50 per cent from the three months previous. The private sector looks to be hit harder, with nearly 40 per cent of private sector employers saying they intend to cut jobs between July and September.
Furlough extension call
The latest bleak figures come as a growing number of politicians, economists, businesses, think tanks and trade unions, including Unite, have called on the UK government to follow the lead of other countries such as Germany and France in extending the furlough scheme.
This week, major manufacturing body Make UK, representing 20,000 firms in engineering, manufacturing, technology and wider industry, was the latest organisation to call for an extension of the state wage subsidy programme.
The industry body highlighted a survey it had undertaken of its members showing two-thirds – 62 per cent – agreed that the government’s furlough scheme should be extended beyond November 1. Make UK said the aerospace and automotive sectors were among the worst impacted and most in need of additional government support, without which vital skills will be lost.
Last week, the TUC also reiterated calls for an extension of the furlough scheme, and launched a blueprint to protect jobs. Its plan outlines a short-time working scheme, similar to what other countries in Europe have adopted, that could serve as an effective successor to the furlough scheme.
Under the new scheme proposed by the TUC, workers would receive 80 per cent of their salary for the hours they are not in work, including training hours, and 100 per cent of their pay for the hours they are in work. Companies would then be given a 70 per cent subsidy by the government, under the condition that they bring back every worker on the scheme for a certain minimum level of hours.
This would incentivise businesses impacted by the coronavirus pandemic to protect jobs and encourage job sharing so that people stay in work as demand slowly returns and companies build back up to full operations.
Unite has likewise backed calls for a short-time working scheme to follow the furlough scheme as it exists in its current form.
Unite strikes short-time working agreement
On Tuesday (September 8), Unite successful struck a short-time working deal with a major aerospace components factory in the North West, BWT Senior Aeropsace in Macclesfield, which will save a number of jobs.
The members of Unite employed by BWT Senior Aerospace have agreed to a four-day working week with pay also being reduced on a pro-rata basis from November 2 until June next year.
The agreement will be reviewed every two weeks and if demand increases then full-time working will be re-introduced at an earlier date.
The agreement has saved more than 40 jobs and serves as a model for how the government, by providing additional support, can save a substantial number of jobs if it helps companies with short-time working schemes.
Commenting on the agreement, Unite regional officer Alan Small called it a “bittersweet victory”.
“Our members have shown exceptional selflessness to agree to a substantial cut in wages, in order to preserve jobs,” he said.
“However, even this sacrifice is not sufficient to prevent heavy job losses.
“This is a result of the government’s failure to provide sector wide support for the aerospace sector. If the government was prepared to offer further support even more jobs could be saved,” Small added.
“The agreement at BWT Senior Aerospace demonstrates that members and employers are prepared to play their part in preserving employment during the pandemic; it is time the government also steps up to the plate.”
SOS for Jobs
Today’s major short-time working agreement is especially significant because it comes just a day ahead of a new Unite SOS for Jobs campaign, which will take its case to Parliament tomorrow (September 9).
Workers from the hard-hit aerospace and automotive industries, including from Rolls-Royce, Airbus and Ford, will gather outside Parliament and demand that the government extend the furlough scheme through short-time working arrangements, among other measures, to turn the back the tide of job losses.
They will send an ad van off to tour SW1 carrying a message for the prime minster. They are also inviting MPs from all parties to join them to sign a pledge in support of UK workers.
Commenting ahead of the event, Unite assistant general secretary for manufacturing Steve Turner said, “This SOS is a heartfelt plea from people who’ve given their working lives to build Britain and position the UK globally as a great manufacturing nation. They are now urging the prime minister ‘do not abandon us’.
“They are not asking for bailouts, just a helping hand to share work on reduced hours to retain both jobs and skills in today’s unprecedented circumstances. All they want is the support of their government, while we work night and day to get viable businesses through this crisis and bring new orders to the book,” he added.
“We are appealing to MPs, help us to get the penny to drop with ministers. Please do not let the good work of recent months go to waste.
“Keep people in work producing the goods to recover and rebuild our economy, not sitting on the dole, idle and impoverished when there is a country to rebuild.
“UK manufacturing is vital to our economic recovery. It will power the jobs of tomorrow and keep communities strong in those parts of the country that the PM has pledged to ‘level up’. But without urgent action by the PM, these communities will suffer terribly as the gates close on the businesses that sit at their heart.”
Stay tuned for our coverage tomorrow of the SOS for Jobs event at Parliament.