New figures reveal that firms in the UK planned to cut almost 800,000 jobs over the last year due to COVID-19 and its effects on the economy.
Research collected from the BBC shows that companies in the UK planned to make almost 800,000 redundancies (795,000) over the last year.
The number of planned redundancies, calculated through the amount of proposed dismissals submitted to the Insolvency Service, peaked in June 2020. During this month alone, there were around 155,000 proposed dismissals submitted. July 2020 was the next highest, with around 150,000 proposed dismissals submitted.
This peak followed the first national lockdown which began in March 2020, seeing sectors such as hospitality forced to close, leading to a rise in proposed redundancies.
In comparison to previous years, 2020 saw the highest number of redundancies planned – significantly higher than the number of job cuts planned during the previous recession (530,000).
Despite this, in the last few months of 2020, the number of planned redundancies dropped significantly. In December 2020, 23,100 planned redundancies were recorded which was the lowest monthly figure last year. However, this was still a third higher than job cuts planned in December 2019.
The latest ONS figures, published in December 2020, also confirm that the largest fall in the number of payroll employees occurred near the start of the pandemic.
It has also been predicted that the Coronavirus Job Retention Scheme (furlough scheme) has led to the number of redundancies made in 2020 being significantly lowered.
The Institute for Employment Studies has called on flexible furlough to be extended into the autumn. Similarly, the Confederation of British Industry (CBI) has also urged the Chancellor to extend furlough ahead of the Budget announced in March.
Tony Wilson, Director of the IES, said:
If [redundancies] start to stabilise around these levels, then they would be at least one third higher than what we’ve seen over most of the last decade, and it’s possible that a combination of this lockdown and then furlough unwinding from May could see numbers creeping up.
This commentary confirms findings outlined by the OBR which predict that the unemployment rate will reach 7.5 per cent by mid-2021, leaving 2.6 million people out of work.
Monica Sharma is an English Literature graduate from the University of Warwick. As Editor for HRreview, her particular interests in HR include issues concerning diversity, employment law and wellbeing in the workplace. Alongside this, she has written for student publications in both England and Canada. Monica has also presented her academic work concerning the relationship between legal systems, sexual harassment and racism at a university conference at the University of Western Ontario, Canada.
