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Almost 300,000 redundancies since Covid pandemic hit UK

The UK’s unemployment rate soared during 2020 as some of the country’s largest businesses were forced to lay off hundreds of thousands of staff, with some of the biggest casualties in the retail, hospitality and travel sectors.

This year the PA news agency tracked nearly 280,000 announced redundancies or jobs that were put at risk since March 23, when the first lockdown started.

It is a clear demonstration of the cost to people of the economic chaos caused by coronavirus.

Some of the cuts, including 5,500 at Cineworld, are likely to be temporary, but the PA figures also hide a large number of job losses, many among smaller companies.

The Office for National Statistics said this month that the number of employees on payrolls had fallen by 819,000, most of which were at the beginning of the pandemic.

According to PA’s analysis, June was the worst month, with nearly 75,000 redundancies or possible job losses announced. However, this included HSBC and BP, whose plans for 35,000 and 10,000 possible redundancies were global, and not just limited to UK jobs.

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The fewest number of job losses announced in a full month was in April, shortly after lockdown started on March 23.

Retail jobs were the hardest hit, according to PA’s analysis, with more than 85,000 potential redundancies. Hospitality and travel companies both announced more than 42,000 losses.

The Bank of England said in November that it expected unemployment to peak at 7.75% next year, far ahead of the current 4.9%.

The Government hoped its furlough plan would save jobs, and has paid £46billion to cover up to 80% of the salaries of 9.9 million people at some point.

But between August and October, as the scheme was being phased out, redundancies reached a record high, at 370,000 in that quarter alone.

The furlough scheme, which was meant to come to an end in the autumn, was extended until April as more restrictions hit the economy.

A Government spokeswoman said: “We have put in place one of the world’s most comprehensive economic responses, spending over £280bn to protect jobs, incomes, and business throughout the pandemic.

“Our Plan for Jobs continues to support people of all ages to get back on the jobs ladder, levelling up the nation as we build back better. We’re doubling the number of Work Coaches across our jobcentres ensuring those in need have access to bespoke support, creating hundreds of thousands of opportunities for young people through our Kickstart Scheme and our SWAPs (sector-based work academy programmes) are helping people retrain for new industries.”

By Daniel Smith

Source: Wales Online

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Nearly 10k job losses expected on ‘Black Monday’

Almost 10,000 people are expected to be made redundant today, on what outplacement firm Randstad RiseSmart is calling ‘Black Monday’.

Based on its experience of the outplacement market, it said 7 December 2020 was likely to be the worst day of the year for job losses in the UK, as many organisations cut back ahead of the new year. It expected 9,550 redundancies to be announced.

“The economy is set to shrink 11% this year, the most it has done since Queen Anne sat on the throne 300 years ago. Not only that, but businesses are starting to deal with the medium term economic fallout of the pandemic – grappling with the fact that the economy may not recover to pre-pandemic levels until 2027,” said Simon Lyle, UK managing director of Randstad RiseSmart.

“While the first week of December is always a bad time for layoffs, the economic outlook means employers will be making more redundancies than ever this year. And this isn’t just the big name retailers we’ve seen so much of in the news – this is all sorts of businesses, across different sectors – who are having to make some very difficult decisions.”

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Its grim prediction came as the Department for Work and Pensions revealed more than 40,000 people – 800 per day – have been referred to its new Job Entry Targeted Support (Jets) scheme in its first two months.

The scheme, which was announced by chancellor Rishi Sunak at the beginning of October, is especially targeted at those who had lost their jobs as a consequence of the Covid-19 pandemic.

People who have been claiming Universal Credit or Job Seekers Allowance are given advice on how to move into “growing” sectors, was well as support with CV-writing and interview techniques. Those who have been out of work for at least three months are given an action plan to follow and are signposted to opportunities for skills development.

Employment minister Mims Davies said: “Many people are sadly facing unemployment due to the pandemic, for the first time in years, and will need help to build their confidence, get back on their feet and apply for new roles – Jets gives people the tools and support they need to succeed.

“During such a challenging time, our new employment support is already helping thousands of jobseekers to get back into work and I’ve met with Jets providers to see first-hand the vital help this programme has already given people across the UK.

“Our Plan for Jobs is supporting people of all ages – we’re doubling the number of work coaches across our Jobcentres, creating thousands of opportunities for young people through our Kickstart scheme and our SWAP scheme is helping people retrain in new industries.”

In the three months to September, redundancies reached a record high of 314,000 according to the Office for National Statistics.

Thousands more jobs on the high street have recently been put at risk with the announcement that Arcadia Group, Bon Marché and Peacocks and Jaeger owner Edinburgh Woollen Mill Group had appointed administrators. Debenhams also planned to close its doors, but Mike Ashley’s Fraser’s Group confirmed today it was in talks to rescue the struggling department store chain.

By Ashleigh Webber

Source: Personnel Today

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Record surge in redundancies pushes UK unemployment to 4.8%

A surge in redundancies and a slump in hiring pushed UK unemployment up to 4.8 per cent in the three months to September, official data showed on Tuesday.

The figures reflect a wave of job cuts made as the government tapered wage support for workers furloughed under its Job Retention Scheme, which had been due to close at the end of October but has now been extended until the end of March next year.

Redundancies climbed to a record high of 314,000 between July and September, a rise of 195,000 from the previous year and 181,000 from the previous quarter, the Office for National Statistics said. Weekly figures showed especially strong growth during the first two weeks of September, when employers had to pay more towards the cost of furloughed workers in the run-up to the scheme’s scheduled end.

“The government’s failure to face up to the scale of this jobs crisis in time has cost people their livelihoods,” said Jonathan Reynolds, Labour’s shadow work and pensions secretary. He called on ministers to provide urgent support for those who had lost jobs and to fund the creation of new roles through green investment.

Rishi Sunak, the chancellor, said the figures “underline the scale of the challenge we’re facing”, adding: “I want to reassure anyone that is worried about the coming winter months that we will continue to support those affected.”

Job losses look set to climb further: the unemployment rate averaged 4.8 per cent over the three months to September, but experimental weekly figures from the ONS put it at 5.1 per cent by the end of that period.

The UK employment rate stood at 75.3 per cent in the three months to September, with 32.51m people in work — almost a quarter of a million fewer than a year earlier.

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Despite the weakening of the labour market, unemployment remains well below the worst-case projections of the Office for Budget Responsibility, and economists said the extension of government income support would both delay and limit the damage.

The fall in employment was especially steep for young people, with a drop of 174,000 on the quarter among 16 to 24-year-olds, down to a record low of 3.52m. There was also a clear divide by gender, with men faring much worse than women. And there has been a dramatic drop in the foreign-born workforce, with the number of EU nationals working in the UK 364,000 lower than a year earlier, and the number of non-UK nationals from other countries down by 65,000.

Samuel Tombs, at the consultancy Pantheon Macroeconomics, said the chancellor’s change of tack on furlough had “greatly improved the near-term outlook for employment”, especially as hopes of a vaccine might now persuade companies to keep staff on their books over the winter in expectation of a recovery in demand next summer.

Tony Wilson, director of the Institute for Employment Studies, said the changes in unemployment and employment were “worrying but not catastrophic”, although the continued dearth of hiring was troubling.

He noted that the number of people starting a new job between July and September was even lower than it had been during the spring lockdown. “Every recovery is built on a rebound in hiring but it didn’t happen in the summer,” he said.

This lack of hiring is one reason why youth unemployment has risen much faster than the overall jobless rate, with few openings for new labour market entrants.

Separate figures published on Wednesday by the Institute of Student Employers show a 12 per cent drop in the number of graduate jobs in 2020, and a much bigger fall in the number of internships and placements that often lead to permanent roles, with most employers also planning to cut recruitment in 2021.

Business groups, think-tanks and unions said government policy was now too narrowly focused on protecting jobs, and urged ministers to do more to spur new job creation, by cutting employer taxes, or by directly funding new jobs in the green economy and public services.

The ONS data gave some early signs of the labour market starting to pick up in the autumn, but this was before the spread of local Covid-19 restrictions and the announcement of the second national lockdown.

The ONS said data from HM Revenue & Customs suggested only a slight drop of 33,000 in the number of payroll employees between September and October, although this still left the number on company payrolls at 782,000 below pre-pandemic levels.

The number of vacancies advertised climbed steadily from August to October, driven by hiring in small businesses, but it remained almost a third lower than a year ago, even at the end of this period.

Annual growth in employees’ pay was stronger than the previous month — reflecting people returning to work on full pay after a period on furlough. However, this too was well below pre-pandemic levels, with annual growth of 1.3 per cent in total pay and 1.9 per cent in regular pay — the gap between the two measures reflecting lower bonuses.

And although the return of furloughed workers drove a rebound in working hours from the lows of the spring lockdown, average weekly hours were still below their level in March, and total weekly hours worked in the UK were more than a tenth below pre-pandemic levels.

“As the crisis enters its ninth month and second lockdown, job losses will continue to mount,” said Nye Cominetti, economist at the Resolution Foundation. “Crucially, this is as much about those out of work struggling to find new roles as it is about job losses.”

By Delphine Strauss

Source: Financial Times

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UK jobless rate hits 4.5% as work-protection plan nears end

UK jobless rate rose by more than expected in the three months to August, before the end of the government’s broad coronavirus job-protection plan and the imposition of new restrictions to slow the pandemic.

The jobless rate hit 4.5%, its highest in more than three years and above the forecast of 4.3% in a Reuters poll of economists.

The number of people counted as unemployed rose by the most since 2009, during the global financial crisis, and the Office for National Statistics revised up its estimate of job losses earlier this year, raising its estimate of unemployment in the three months to July to 4.3%.

“Since the start of the pandemic there has been a sharp increase in those out of work and job hunting but more people telling us they are not actively looking for work,” Jonathan Athow, the ONS’s deputy national statistician, said.

“There has also been a stark rise in the number of people who have recently been made redundant.”

The ONS data showed redundancies jumped by a record 114,000 on the quarter to 227,000, their highest level since 2009.

The number of people in employment fell by 153,000, much higher than a median forecast for a fall of 30,000 in the Reuters poll.

Finance minister Rishi Sunak reiterated on Tuesday that his priority remained to slow the rising job losses. However, he is replacing a 50 billion-pound wage-subsidy scheme, which expires at the end of this month, with a less generous programme.

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“I’ve been honest with people from the start that we would unfortunately not be able to save every job,” he said.

Prime Minister Boris Johnson introduced a new system of restrictions for England on Monday that will hit the hospitality industry, and a minister said the government may have to go further.

“With economic support falling just as lockdown restrictions increase across the country, we should prepare for a major increase in unemployment over the coming months,” said Nye Cominetti, an economist at the Resolution Foundation think tank.

The Confederation of British Industry said ramping up testing was key to securing an economic recovery.

There were some positive signs in Tuesday’s data.

Tax office figures showed the number of staff on company payrolls rose by a monthly 20,000 in September, slightly reducing the total number of job losses by that measure since March to 673,000.

The number of job vacancies rose by the most on record in the three months to September, although the total remained down 40% compared with a year earlier.

The Bank of England has forecast that the unemployment rate will hit 7.5% by the end of the year. But BoE Governor Andrew Bailey on Monday repeated his warning that the recovery could prove weaker than the central bank’s forecasts.

Britain’s economy grew in August at its slowest pace since May as its recovery from the lockdown slowed.

Scores of companies have announced plans to cut jobs since the pandemic struck. Last week the owner of clothing retailers Edinburgh Woollen Mills, Peacock’s and Jaeger put 24,000 jobs at risk by saying it was set for administration.

Reporting by William Schomberg and Andy Bruce

Source: UK Reuters

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Unemployment and redundancy rates are on the rise in the UK – here are the places most affected

The latest set of economic data released by the National Office for Statistics (ONS) paints a stark picture of the pandemic’s continued impact on the UK economy, with unemployment and redundancies on the rise.

Early indicators for August 2020 suggest that the number of employees on payroll in the UK was down by around 2.4 per cent (or 695,000 people) compared with March 2020, before the impact of Covid-19 had been felt in the economy.

Unemployment has risen to the highest level for almost two years, at 4.1 per cent across the UK, up from 3.9 per cent in the previous quarter. This rise has been driven disproportionately by young people finding themselves out of employment in the last few months, with a record decrease of 146,000 among 18 to 24 year olds in employment.

However, there was an increase in the number of 25 to 64 year olds in employment, with 236,000 people finding work. As a result, despite significant decreases in employment for certain demographics and in certain areas, the overall employment rate has risen slightly in the last quarter.

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Redundancies have also increased significantly, up by 48,000 this quarter. While the ONS notes that redundancy figures were historically low prior to this release, the changes now seen in the redundancy rate both annually and quarterly are the largest increases since recession in 2009 following the global financial crash.

The areas with the highest levels of unemployment

North East: 5.2% (no change)North West: 3.5% (-0.6)Yorkshire and The Humber: 4% (+0.1)East Midlands: 4.4% (+0.7)West Midlands: 4.4% (-0.4)East: 3.7% (+0.1)London: 5% (+0.4)South East: 3.5% (+0.5)South West – 3.8% (+0.8)Wales – 3.1% (+0.1)Scotland – 4.6% (+0.1)Northern Ireland – 2.9% (+0.6)UK – 4.1% (+0.2)

While unemployment rates are currently highest in the North East, followed by London and Scotland, the areas which have seen the largest increases in the unemployment rate over the last quarter are the South West, East Midlands and Northern Ireland.

Though they are still dealing with relatively high rates of unemployment, the North West and West Midlands both recorded notable decreases in the unemployment rate over the last quarter.

Commenting on the ONS statistics, Head of Economics for the British Chamber of Commerce, Suren Thiru, said, “Despite the slight rise in the unemployment rate, the furlough scheme continues to limit the pandemic’s full impact on headline job figures.

“With many firms still facing waves of cash flow problems, rising costs and an uncertain economic outlook, it is probable that unemployment will escalate sharply as government support winds down.

“To help avoid a damaging cliff edge for jobs more must be done to help firms keep staff on through this deeply challenging period.”

By Ethan Shone

Source: News Post Leader