One third of UK businesses to cut jobs in Q3

One in three UK businesses expect to make job cuts by October, according to a new survey of 2,000 employers.

The research from the CIPD and the Adecco Group reveals a 50 percent increase in the number of organisations expecting to cut jobs compared to three months ago. More than twice as many private sector employers (38 percent) expect to make redundancies compared to those in the public sector (16 percent).

However, employers are intending to hire more, with almost half (49 percent) expecting to take on new recruits in the next three months, compared to 40 percent in the previous quarter. But that confidence remains well below levels seen in recent years.

Employers are also intending to be stricter on pay increases over the next 12 months, with those planning pay reviews only intending to increase salaries by 1 percent, compared to the 2 percent median increase expected this time last year.

“This is the weakest set of data we’ve seen for several years. Until now, redundancies have been low - no doubt due to the Job Retention Scheme - but we expect to see more redundancies come through this autumn, especially in the private sector once the scheme closes,” Gerwyn Davies, senior labour market adviser at the CIPD, said in a statement. “Hiring confidence is rising tentatively, but this probably won’t be enough to offset the rise in redundancies and the number of new graduates and school leavers entering the labour market over the next few months. As a result, this looks set to be a sombre autumn for jobs.

“We urge organisations to do all that they can to keep employees in work and only make redundancies as a last resort, exploring all other options first. This could include freezing recruitment, reducing hours or restricting overtime, or cuts to bonuses and deferring salary increases.”

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