Britain must prepare for a huge wave of job losses that could reach 700,000 by the end of the year, according to new analysis from a research group.
The number of redundancies planned in the UK will exceed anything seen in “at least a generation”, according to a study that warns employers plan to make twice as many job cuts as they did at the height of the last recession.
The alarming figures come from the Institute for Employment Studies (IES), which obtained data from employers planning 20 or more redundancies amid the Covid-19 crisis. The research group have warned actual job losses come Autumn could be as high as 700,000 after furlough schemes are put to a stop.
The IES research was published as new restrictions to halt the spread of Covid-19 came into force in the UK. The ‘rule of six’ restrictions, which came into effect today (14 September), banning social gatherings of more than six people and apply both indoors and outdoors in England and Scotland, and indoors in Wales.
Suggestions have been put forward to the government to replace the current coronavirus job retention scheme with a new coronavirus work-sharing scheme, that would encourage firms to keep employees in work rather than putting them on furlough, and that the government should strongly consider sector-specific extensions focusing on the challenges hard-hit industries would face as the UK entered its economic recovery phase.
Tony Wilson, director of the IES, has said the data “[laid] bare the scale of the jobs crisis” the UK was facing in the coming months. It was a “sad reality” that redundancies could not be avoided entirely, but employers and the government could do more to minimise job losses.
“Our top priority must be to support those facing the prospect of losing their jobs to find new, secure and good-quality work as quickly as possible. We are in the midst now of a significant recession, and we need urgent action to support employment demand.”
As we near closer to the end of the furlough scheme (31 October), pressure is mounting on the chancellor to rethink this decision and delay the ending of the support scheme.
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