Two-fifths of London SMEs plan to shed workers as furlough ends and pandemic restrictions return
Two-fifths (42 per cent) of owner-managed businesses in London are planning to make redundancies this winter now the safety net of furlough has been removed, according to Moore UK.
The accountancy network’s latest bracing quarterly survey reveals that a third of owner-managed businesses in the UK are planning to make shed staff over the next six months.
SMEs in London are the most likely to reduce their workforce compared to other regions in the UK.
Out of the businesses planning to make redundancies, the report suggests they could let go of as much as 45 per cent of their workforces over the next six months.
The results reflect the effects of the pandemic on the finances of restaurants, hotels and pubs, which make up a significant part of London’s economy.
These factors will only be exacerbated by Downing Street’s announced Plan B measures, which includes work from home advice and wider mask usage.
The decision could result in businesses struggling to attract customers in city centres, and exposed to heavy losses without business support.
Maureen Penfold, Chair of Moore UK, says that while a wave of redundancies did not materialise at the end of furlough on September 30, many businesses are now waiting to see whether layoffs become necessary over the coming months.
Penfold said: “The UK is far from out of the woods when it comes to redundancies. It’s surprising to see so many businesses are considering reducing staffing numbers so substantially. Policymakers should be careful not to assume that the economy is back in rude health – especially taking into account how the new restrictions just implemented may further impact businesses.”
The report also suggests almost half of owner-managed businesses will raise prices over the next six months due to severe supply chain disruptions.