Planned COVID redundancies are twice the amount seen in financial crisis of 08

The spread of COVID-19 and its disruption to the economy has led to twice as many redundancies being planned compared to the height of the recession brought on by the financial crisis of 2008-9.

This is according to the Institute for Employment Studies (IES), who found that 380,000 redundancies were planned for May to July, which pales in comparison to the 180,000 job losses from January to March in 2009. The research centre for employment, education and HR policy believe that there will be 450,000 redundancies made this Autumn, the IES did warn that this number could increase to 735,000 redundancies.

The IES was able to obtain this data through a Freedom of Information (FOI) request which is made to analyse data back to 2008 regarding redundancies.

It is the law that the Government must receive an HR1 form from any business that is planning on making 20 or more redundancies in England, Scotland or Wales.

Tony Wilson, director of IES said:

Our top priority must be to support those facing the prospect of losing their jobs to find new, secure and good quality work as quickly as possible. At the same time we are in the midst now of a significant recession and we need urgent action to support employment demand. The best way to do this would be to reduce labour taxes, by raising the threshold at which employers pay National Insurance.

We also mustn’t accept that all of these redundancies are inevitable. Although most of those who were furloughed by their employers are now back at work, there are still many parts of the economy where perfectly viable businesses cannot bring people back because of the ongoing disruption caused by the pandemic. So we need tightly targeted support to help these firms ride out the next few months, where they can commit to not laying staff off.

This comes as a group of cross-party MPs, put pressure on Rishi Sunak, Chancellor of the Exchequer to “carefully consider targeted extensions” of the furlough system to assist certain industries in financial trouble beyond October. The MPs were reacting to the Treasury Select Committee publishing its second report in to the economic consequences of COVID-19 which it believes could lead to long-term unemployment and respected companies going out of business.

Back in May, HRreview reported Deutsche Bank’s findings which stated that letting employees go during the COVID-19 crisis could be far more damaging than doing so during the financial crisis of 2008-9.