UK high street suffers jobs bloodbath

Thousands of jobs have been axed across the UK high street as the government starts to wind down its £25bn furlough scheme that has kept millions of workers employed during the pandemic.

As Prime Minister Boris Johnson told MPs on Wednesday lunchtime that his government would “build, build, build and deliver jobs, jobs, jobs”, further losses were being announced by retailers John Lewis, Harrods and Philip Green’s Arcadia Group, as companies continue to fight for survival.

Up to 5,000 job cuts were disclosed on Wednesday morning by SSP Group, the travel food retailer behind outlets such as Upper Crust and Caffè Ritazza. Thousands more were put in danger on Tuesday at retailers including TM Lewin, Bensons for Beds and Harveys.

The latest round of cuts this week will weigh heavily as the UK government scrambles to kick-start the economy, with the gradual easing of lockdown restrictions alongside plans for investment in infrastructure projects across the country. 

But many companies harbour doubts over how quickly the economy will bounce back, particularly in hard-hit sectors such as retail and aviation.

Airbus overnight warned that it would cut 15,000 jobs — with 1,700 positions in the UK alone. EasyJet said it could lose as many as 727 pilot jobs in the UK as well as potentially close bases at Stansted, Southend and Newcastle airports. In May the airline said it would axe up to 30 per cent of its workforce, equivalent to about 4,500 jobs. On Friday, Royal Mail said that up to 2,000 jobs would be lost.

Retailers continue to bear the brunt of the job losses even as the government gradually eases the lockdown that has kept shoppers at home.

On Wednesday, John Lewis boss Sharon White warned that staff would lose their jobs following the closure of certain stores and upmarket retailer Harrods said it would axe 700 roles in its luxury department stores.

Arcadia Group, which owns Topshop, said it would cut 500 jobs in its head office. The fashion group has used the government’s furlough scheme to help keep the bulk of its staff paid.

Company bosses warn that further job losses are inevitable as the UK gradually winds down its furlough scheme, which has supported the wages of 9m workers across the country during the pandemic.

Next week, the chancellor Rishi Sunak will unveil a package of measures to help the economic recovery, with business groups lobbying for cuts to value added tax and an extension to loan and grant schemes to help businesses get back on their feet. During prime minister’s questions on Wednesday, Mr Johnson said the risk of job losses was “very very serious”, which was why he had committed to a “new deal” programme of infrastructure building.

The Financial Times has calculated that more than 100,000 job losses have been announced by larger companies since the start of the pandemic, although this does not include the bulk of the cuts across smaller businesses that have struggled to stay afloat during the lockdown. Tens of thousands of job cuts were announced last month at companies such as Centrica, Johnson Matthey, Nissan and Bombardier.

The number of people claiming out-of-work benefits in the UK rose to 2.8m in May, according to the Office for National Statistics — an increase of 528,000.

The axing of more than half the UK jobs at SSP comes as the air travel industry has virtually shut down and passenger numbers at railway stations have dropped 85 per cent compared with last year. SSP said it expected that only a fifth of its outlets would be in a position to reopen by autumn.

“Covid-19 continues to have an unprecedented impact on the travel industry and on SSP’s businesses in all geographies,” said Simon Smith, the company’s chief executive. “In the UK, the pace of the recovery continues to be slow.”

Before the pandemic, SSP employed 40,000 people in 35 countries. The job cuts unveiled on Wednesday are limited to the UK, where it operates about 570 units in railways and airports that need 9,000 workers in peak summer season. Fewer than 10 of those units are open at present.

The company has not begun large-scale job cuts in continental Europe, North America or the rest of the world, where it expects a more rapid recovery, a longer time for workers to receive government support or contractual lay-off arrangements.

Additional reporting by Tanya Powley