The number of proposed job cuts has declined, especially in comparison to previous predictions regarding what redundancy figures could look like as the furlough scheme begins to wind down.
New data published by the Insolvency Service indicates that, in August, only 12,687 jobs were classed as potential redundancies with firms submitting a total of 201 HR1 forms.
HR1 forms are used to inform the Government of when firms are proposing to dismiss 20 or more employees at a single establishment.
Employers are required to notify at least 30 days before the first dismissal where 20 to 99 redundancies are proposed, and at least 45 days before the first dismissal where 100 or more redundancies are proposed.
These figures are significantly lower compared to the number of jobs which were at risk earlier this year.
In January 2021, it was suggested that 31,946 jobs could be cut as a result of the pandemic, indicating a drop of roughly 60 per cent since this time.
In addition, at the height of the pandemic, the number of proposed redundancies stood at 155,576 – over ten times the amount of current proposed job cuts.
There has been a significant amount of uncertainty about what the end of the furlough scheme will mean for the labour market, given that the rate of people coming off the scheme has slowed down in recent months.
A report by the Resolution Foundation suggests that many will return back to their old jobs although this will not be possible for all due to the accelerated rate of hiring at present.
Despite this, the report has insisted that unemployment will not hit predicted levels which were forecast to be around 10 per cent.
However, recent research by the CBI has insisted that the end of the furlough scheme will not solve staff shortages with the possibility that this problem could persist for up to two years.
According to the most recent figures, around 1.9 million workers were still on the furlough scheme at the end of June which was a decline of half a million compared to the month before. However, it is not yet clear how this has changed in the following months.
Tony Wilson, Director of the Institute for Employment Studies, explained that unemployment is going to keep falling back:
The end of furlough may well slow or reverse that [decline in unemployment], but the biggest issues in the labour market now are that there’s not enough workers rather than not enough jobs.