Autumn redundancies in the UK could exceed 450,000


Lloyds Banking Group has resurrected plans for hundreds of redundancies Willy Barton / Shutterstock.com

Almost half a million redundancies could be made this autumn alone, according to data that highlights the potential scale of the jobs crisis.

Based on the number of planned redundancies being notified to the Insolvency Service, the Institute for Employment Studies (IES) estimated that the UK would see around 450,000 job losses in the coming months.

However, if notifications made via HR1 forms continued to rise, the number of redundancies could exceed 700,000, it warned. Redundancy notifications in the past two months ran at five times the average figure over the previous 12 years (32,000).

Last week it was reported that hundreds of staff at restaurant chain Pizza Hut and high street bank Lloyds Banking Group were facing redundancy.

Pizza Hut planned to close up to 29 of its 244 UK outlets with the potential loss of 450 jobs, while LLoyds expected to cut 865 jobs as it revived its restructuring plans.

IES director Tony Wilson said that organisations might not be able to avoid restructuring in light of the challenges the pandemic has brought, but the government could do more to minimise job losses and support those at risk of unemployment.

“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. At the same time we are in the midst now of a significant recession and we need urgent action to support employment demand. The best way to do this would be to reduce labour taxes, by raising the threshold at which employers pay National Insurance,” he said.

“We also mustn’t accept that all of these redundancies are inevitable. Although most of those who were furloughed by their employers are now back at work, there are still many parts of the economy where perfectly viable businesses cannot bring people back because of the ongoing disruption caused by the pandemic. So we need tightly targeted support to help these firms ride out the next few months, where they can commit to not laying staff off.”

The data, released to the IES following a Freedom of Information request, showed that employers notified the government of 380,000 proposed redundancies between May and July 2020. This is more than double the peak reached in the 2008-9 financial crash, when 180,000 employees were notified at being at risk of redundancy in January-March 2009.

In June and July 2020 combined, more than 300,000 employees have been notified in HR1 forms as being at risk of redundancy – with 156,000 reported in June and 150,000 in July 2020. By comparison the highest monthly figure reported in the last recession was 90,000, in March 2009.

In the three months to September it is estimated there will be 445,000 redundancies, and a similar figure in the overlapping three months to October.

However, the IES warned that the actual number of redundancies made earlier this year could be higher as employers are only required to submit an HR1 form to the Insolvency Service where 20 or more staff are at risk of redundancy.

The IES called on the government to:

  • Introduce “rapid response” services – delivered in partnership with the Jobcentre Plus, colleges, training providers, recruitment firms and local government – to provide employment and training support to those facing redundancy
  • Increase the threshold at which employers start paying National Insurance contributions, in order to reduce the cost of employment
  • Offer targeted support for organisations and sectors facing short-term disruption due to the pandemic, which should be linked to commitments to avoid redundancies.

Numerous business bodies and commentators have called for an extension to the Coronavirus Job Retention Scheme beyond October, including the Treasury Select Committee which said it should continue to operate for specific sectors.

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