Coronavirus: Redundancies rise fivefold as pandemic hits jobs

The number of firms planning 20 or more redundancies by June rose more than fivefold compared to June last year, figures obtained by the BBC show.

Data shared in response to a Freedom of Information request shows 1,778 firms notified the government of plans to cut more than 139,000 jobs in June in England, Wales and Scotland.

In June 2019, only 345 firms notified plans to cut 24,000 jobs.

The cuts came as coronavirus wiped more than a quarter off UK economic output.

The figures give an insight into the surge of redundancies announced since Coronavirus blighted the UK.

Airbus, Royal Mail, the airport services group Swissport, HSBC, Centrica and the Restaurant Group, owner of Frankie and Benny’s, were among the businesses to announce redundancy plans in June.

Firms planning to make 20 or more staff redundant have to notify the government by filing a form called an HR1 Advance Notice of Redundancy.

The number of these forms filed with the Insolvency Service shows a steep rise in the number of firms planning to cut staff.

The figures from May and June show a substantial increase from the same months the previous year, and from March and April, when the coronavirus lockdown began.

Tony Wilson, director of the Institute for Employment Studies, said: “I would expect it to be bigger in July and bigger again in August, because there was a wave of firms that announced redundancies in the first week of July and the first week of August.

“I think it is inevitable now that redundancy numbers will be higher than they were at the peak of the last recession in 2008.”

Companies including WH Smith, Dyson, Dixons Carphone, John Lewis, and Casual Dining Group have all announced redundancies recently, and there has been a surge in requests for redundancy advice.

Adding up the total number of dismissals planned shows a similar picture of stricken employers cutting staff.

Though the June figure excludes information from 79 firms, which was not available when the numbers were compiled, it shows a steep rise in the number of positions being considered for redundancy.

The total number of employers making redundancies will be higher than these figures, as firms making fewer than 20 posts redundant at any one “establishment” do not have to notify government.

However, employers often end up making fewer redundancies than the original number they notify to the government.

Consultation process

The redundancy process takes time. It includes a consultation period of a minimum of 30 days for 20 staff and over, and 45 days for 100 or more staff.

This helps to explain why official redundancy figures gathered by the Office for National Statistics do not yet show a significant rise.

In Northern Ireland HR1 forms are filed with the Northern Ireland Statistics and Research Agency and they are not included in these figures.

In response to the BBC’s findings the Department for Work and Pensions pointed to the measures it has introduced to try to support those looking for work.

“Across the country our Plan for Jobs will give business the confidence to recruit and retain workers… and – through the Kickstart scheme – create hundreds of thousands of new, subsidised jobs for young people,” a spokesperson said.