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Covid: Almost 500,000 layoffs expected since the start of the crisis

Logos of Pizza Express, Travelex, Debenhams and Pret a Manger

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British employers planned 58,000 layoffs in August, bringing the total to 498,000 for the first five months of the Covid crisis.

Some 966 separate employers have told the government that it plans to cut 20 or more jobs, up from 21

4 last August, a more than fourfold increase.

However, the figures fell from June and July levels, both of which saw 150,000 expected cuts.

The figures were released to the BBC after a request for freedom of information.

Employers planning 20 or more layoffs

HR1 forms sent

The economy recovered in the summer after the unprecedented economic downturn earlier this year, as workers were urged to return to the office and customers were encouraged to spend more thanks to programs like Eat Out To Restaurant coupons. Help Out.

However, a number of large companies from many of the hardest hit industries, such as retail and restaurants, have announced major redundancy plans, including Debenhams, DW Sports, Marks & Spencer, Pret a Manger, currency exchange firm Travelex and WH Smith.

The 58,000 positions put at risk in August were significantly lower than in previous months, but were still more than 150% higher than the previous year.

“There was a sense of optimism in August, we were starting to see more spending and more activity, there was hope for a quick recovery,” said Rebecca McDonald, senior economist at the Joseph Rowntree Foundation think tank. “It seems a lot less likely now.”

Dismissals planned

Proposed dismissal submitted

A government spokesperson said: “Supporting jobs is a top priority, which is why we have set out our jobs plan to protect, create and sustain jobs across the UK.

“We are helping employees get back to work with a £ 1,000 retention bonus, creating new roles for young people with our £ 2 billion Kickstart program and doubling the number of frontline job coaches.”

How will the end of the layoff regime affect layoffs?

The big summer rush may have been partly caused by companies preparing to cut staff before the layoff regime ended on October 31.

This regime, whereby the government pays a portion of workers’ wages when their employers cannot, has helped reduce the number of layoffs linked to the pandemic. A total of 9.6 million jobs were laid off.

But given that most layoff processes take months to complete, companies planning significant layoffs by the end of the layoff should have notified the government in the summer.

Chancellor, Rishi Sunak, unveiled a new employment support scheme last month, in which the government will subsidize the pay of employees who work less than their normal hours due to reduced demand.

It is less generous than the redundancy scheme and in the coming months the data on the redundancies will provide a timely indication of how effective it has been in protecting employment.

“Many employers will have difficult decisions to make in the coming months. Given the design of the new scheme, it seems likely that there will be a significant number of layoffs in the winter,” Ms. McDonald said.

“We are concerned that the lowest paid workers in the hardest hit sectors will be the hardest hit.”

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Multimedia caption“Very scary” redundancy probabilities

Employers are required to notify the government when they intend to lay off 20 or more employees at a single “establishment” using an HR1 layoff notice form. However, they often make fewer locations redundant than the number initially notified.

These figures show an increase in redundancy plans long before the data on redundancies from the Office for National Statistics, which appear with a delay of several months.

ONS numbers showed 156,000 layoffs from May to July, up from 107,000 in the previous three months.

However, any redundancy process involving fewer than 20 people does not show up in these figures, so the final total is likely to be greater than HR1’s numbers suggest.

Northern Ireland companies submit HR1 modules to the Northern Ireland Statistics and Research Agency and are not included in these figures.

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