Autumn ‘could see mass layoffs’ as furlough scheme ends

Institue for Employment Studies says urgent measures needed to support those affected.

Autumn ‘could see mass layoffs’ as furlough scheme ends Getty Images
Hundreds of thousands of people are facing redundancy.

Hundreds of thousands of redundancies could be announced in the autumn, the highest level in a generation, a study suggests.

An analysis by the Institute for Employment Studies (IES) found it was likely the UK will be hit by around 450,000 redundancies in the coming months, and they could exceed 700,000 if job loss notifications continue to rise.

Losing half a million jobs will be the highest level since at least the mid-1990s, said the think tank, which called for urgent measures to support those affected and stimulate employment growth.

Between May and July 2020, employers notified the Government of nearly 380,000 staff at risk of redundancy, more than double the peak reached in the financial crisis a decade ago, said the IES.

IES director Tony Wilson said: “This data lays bare the scale of the jobs crisis that we’re facing in the autumn, with half a million people likely to lose their jobs in the coming months.

“The sad reality is that this restructuring cannot be averted entirely, but we can do a lot more to minimise the job losses and support those who are most at risk.

“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 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.”

In response, the UK Government highlighted its kickstart scheme to incentivise training and apprenticeships and the job retention bonuses to encourage businesses to bring back furloughed employees.

“Supporting jobs is an absolute priority which is why we’ve set out a comprehensive plan for jobs to protect, create and support jobs across the UK by providing significant, targeted support where it is needed the most,” a spokesman said.

Around 9.6 million jobs have been supported by the furlough scheme since it was set up to protect workers during the Covid-19 lockdown.

But Chancellor Rishi Sunak has previously insisted the scheme will not be extended beyond October 31, instead putting faith in his job retention bonus offering firms £1,000 per furloughed worker brought back.

TUC general secretary Frances O’Grady said it was “too soon to pull the plug” on the scheme.

She said: “Unemployment isn’t just miserable for families, it will hold back the economy, just at the time when if we are facing further spikes and lockdowns we need more support.

“We’ve put forward proposals to the Government for a job retention and upskilling scheme and I’m really appealing to the Chancellor (Rishi Sunak) to stand by working families and keep people at work.”

“The problem is if the Government doesn’t act now we could be facing mass unemployment and we know how much harm that does to the economy and how much more expensive it is in the long run.”