Employers facing difficult financial decisions in the current economic climate are cutting costs by making use of homeworking, a new survey reveals.

According to research by O2, more than one in ten small businesses have closed down their office since the beginning of the credit crunch and sent staff home to work instead.

The survey also shows that 60 per cent of businesses currently working from an office are considering taking a home-based approach, with 62 per cent citing cost cutting as their motivation for doing so.

And 80 per cent of those companies currently working remotely said the lack of a formal business premises does not negatively affect their relationships with clients.

Simon Devonshire, head of O2 SME marketing, said: "Getting rid of the office relieves many small businesses of a major overhead very quickly and shows a rapid response to current economic pressures."

Michael Phillips, product director at BroadbandChoice.co.uk, believes next generation broadband will make homeworking much easier for employers.