Thousands of job losses expected as furlough scheme ends
Thousands of workers will be made redundant when the government’s Coronavirus Jobs Retention Scheme scheme ends next month, according to the latest research.
In total, 60 per cent of the UK’s medium-sized companies will cut jobs when the furlough scheme – which saw the government cover up to 80 per cent of the wages of temporarily laid off workers – ends.
Meanwhile 97 per cent of the 500 businesses surveyed by accountancy firm BDO said they have already made redundancies, with more than half cutting between 11 per cent and 20 per cent of their workforce.
Less than 10 per cent had no plans for redundancies at all.
Bosses also raised concerns over future funding, with a third reporting that currently they can not continue to trade for longer than six months. Meanwhile, separate research by insurer Simply Business found that almost one fifth of small and medium-sized enterprises do not think they would survive another lockdown and would be forced to shut down.
Mid-sized businesses account for almost 8m jobs and generate £1.4 trillion a year, BDO said.
Paul Eagland, managing partner at BDO, said: “These figures highlight some of the very tough challenges and decisions businesses are faced with.
“The leisure and hospitality sector, in particular, is facing the double-whammy of both the furlough support and Eat out to Help out schemes ending.
“The government took bold action with its furlough policy which has undoubtedly saved many jobs and businesses.
“However, the harsh reality is that these are unprecedented times and we would encourage the government to introduce policies that will help UK business survive and ultimately compete internationally – other governments around the world are and will be introducing policies to protect their businesses – we must not fall behind, particularly with Brexit looming.”