Early Data Suggests That the Wave of Job Cuts Expected to Follow the End of the Furlough Program Has Not Occurred

Unemployment

Employers offered a record number of redundancies in September, which was very close to the previous record.

Many companies employing large numbers of furloughed employees claim they have taken them all back and that unions had never heard of major redundancy.

It was estimated that around one million workers were on furlough at the end of the scheme.

After 18 months, the furlough program, in which the government paid a portion of workers’ wages, ended in September.

Many employers were concerned that they would not be in a position to pay workers’ wages after the scheme ended. This meant that they would need to reduce jobs.

However, in September, the number of redundancies by firms was at an all-time low.

With a total 13,836 jobs at stake, just over 200 companies in Great Britain reported to the government that they planned to lay off workers in September.

Although this was an increase in August, it was still far below last summer’s levels and one of the lowest numbers ever recorded in data that goes back to 2006.

These numbers don’t include smaller businesses, as employers are only required to notify the government when 20 or more jobs are lost.

However, the fact that they filed at the beginning of the process is a good indicator of how the labor market is changing.

 

Redundancy lows

Another evidence suggests that there was less job loss as a result of furlough ending than initially thought.

When the BBC contacted them this week, they did not receive any news about major redundancies of their members from the Community, CWU or GMB trade unions.

Google searches for “redundancy” – another indicator of job loss – showed a slight increase at September’s end, but still less than half the levels during the worst pandemic of last summer.

Tony Wilson, Director of the Institute of Employment Studies, stated that “with estimates of actual redundancies as well as real-time online searches in relation to redundancy both lower then before the pandemic.”

According to the Resolution Foundation, around a million people were furloughed by the end of the scheme. Around half of them were part-time furloughed and half were full-time workers.

 

What is each company doing?

BBC reached out to 31 employers that claimed PS1m or greater in June, the latest month for which official figures were published.

Although none of them told the BBC that they were making large numbers of redundancies, some did not comment on the matter or didn’t reply.

Airlines and travel companies were the main users of the furlough program, since international travel is still much lower than it was pre-pandemic.

British Airways was the largest user of the scheme. It claimed more than PS10m in June. By September, all furloughed workers had returned to work.

Other major scheme users include Easyjet, Jet2, Tui and Virgin Atlantic, Hays Travel and Airbus. DHL, delivery firm DHL is an air traffic controller NATS. Swissport handles baggage. Gatwick, Heathrows, Manchester, Stansted airports have all confirmed to the BBC that they will not be making any redundancies due to the end of furlough.

Shai Weiss, chief executive of Virgin Atlantic, wrote on LinkedIn that the furlough program was crucial for Virgin Atlantic and other companies during the pandemic. It helped us protect as many jobs as possible.

In the first months of the pandemic, thousands of people lost their jobs at travel companies.

Many in the industry believe that there will be no further job losses after a series of travel restrictions were lifted in recent weeks.

J D Wetherspoon, Travelodge and other travel companies stated that they have already returned all furloughed workers in the summer.

If there isn’t enough work, workers may need to work part time while they are on furlough.

Workers at smaller companies may not have the same opportunities as workers at larger ones.

Samuel Tombs (chief UK economist at Pantheon Macroeconomics) stated that six out of ten furloughed employees were from firms with less than twenty employees. “I worry about whether those firms will be able to bring back full-time staff,” said Tombs.

Akeela Zahair
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