Coronavirus: Almost 40 per cent of UK firms expect to cut staff
Roughly 40 per cent of UK firms expect to lay off staff over the next 12 months, a survey has shown, raising the prospect of many more job cuts in the UK economy.
UK unemployment has already surged as coronavirus lockdown measures cause businesses to close or cut costs significantly.
Close to 1m people made new universal credit benefits claims in the first two weeks of the UK’s lockdown. This suggests large numbers of people were laid off by firms, although not all claimants will have lost their jobs.
A business barometer from Lloyds Bank today suggests the number of job losses is set to rise considerably.
The gauge of firms’ hiring intentions fell into negative territory for the first time since 2011, with 37 per cent saying they expect to reduce staff numbers. Close to a third of firms said they expected to freeze pay.
Overall, 74 per cent of businesses said they were being hit hard by coronavirus, although 10 per cent said the lockdown had benefited them. One fifth of firms said they expected to increase employment.
Companies were not optimistic about a quick bounce-back. Manufacturing firms were most pessimistic, with 22 per cent expecting their supply chain to return to levels seen before the outbreak within three months.
In the retail sector, only 28 per cent of firms thought supply chains would return to normal in three months. However, in construction 45 per cent thought so, reflecting increased optimism in a sector that has seen some building sites restart.
Welsh and Scottish businesses have been particularly damaged by coronavirus, according to the Lloyds barometer, with confidence falling on the gauge to minus 52 and minus 50 respectively.
Paul Gordon, managing director for small and medium-sized businesses at Lloyds Bank, said: “April has shown the unprecedented impact of the shutdown for businesses across the UK with trading prospects and overall confidence free-falling across the regions.”
“During this time it is important that businesses take steps to access the government schemes such as tax deferment, rates reductions, small business grants and the job retention scheme and the various finance options available.”