LONDON (Reuters) – Britain is on course to suffer the biggest increase in redundancies in a generation in the second half of 2020, based on lay-off notifications by employers hit by the coronavirus shock to the economy, a think tank said on Monday.
Around 650,000 people, and potentially a lot more, were likely to be made redundant in Britain between July and December, the Institute for Employment Studies, an independent research organisation.
“Sadly, much of this restructuring appears now to be inevitable,” it said.
Layoff notifications were running at more than double the levels of the 2008/9 recession and around 450,000 redundancies could occur in the July-September period – 50% more than the quarterly peak during the global financial crisis.
However, it was not inevitable that the high level of redundancies would lead to mass unemployment if people were able to find jobs with new employers, the IES said.
The government should cut the costs of employment to boost hiring and provide “tightly targeted” wage support in industries and areas that remain viable in the longer-term, the IES said.
Finance minister Rishi Sunak has resisted calls to extend his coronavirus job retention scheme which is due to expire at the end of October.
Employers’ groups are urging him to cut social security contributions to soften the expected rise in unemployment.
The IES said its forecasts were based on data from employers planning 20 or more redundancies.
Official labour market figures due on Tuesday are expected to show Britain’s jobless rate rose in the three months to July for the first time having held at 3.9% since the COVID-19 lockdown began in March.
More up-to-date figures from Britain’s tax office are expected to reveal further job losses on top of the surge of 730,000 reported between March and July.
(Writing by William Schomberg; editing by Carmel Crimmins)
