1-in-3 UK SMEs planning redundancies, Study says

A survey of 442 owner-managed businesses by accounting and advisory network Moore UK states one in three UK small owner-managed businesses are planning to lay off workers now that the government’s furlough scheme is over. It added that they are considering dropping around 45 per cent of their workforce in the next six months.
Those in London are said to be more likely to be planning redundancies than those in any other part of the UK. The report said the situation reflects on the pressure placed by the ongoing pandemic on the food and beverages industry, which make up a major part of the city’s economy. It added that while a wave of redundancies did not materialise at the end of the furlough on September 30, many businesses are now waiting to see whether layoffs become necessary over the coming months.
Maureen Penfold, Moore UK chair said, “The UK is far from out of the woods when it comes to redundancies. It’s surprising to see so many businesses are considering reducing staffing numbers so substantially. Policymakers should be careful not to assume that the economy is back in rude health - especially taking into account how the new restrictions just implemented may further impact businesses.”
Penfold said business’ cash flow might allow them to keep their full workforces employed for now but they have plans in place to quickly make redundancies should the need arise. Moore’s survey also showed that 49 per cent of respondents expect to have to increase the prices they charge over the next six months. 59 per cent of those say that disruption to their supply chain is the main reason for doing so. Penfold said, “The effects of supply chain disruption because of Brexit and COVID have been felt keenly by a lot of businesses. These issues are now endemic. A lack of logistics capacity and bottlenecks in ports around the world are driving up the cost of the goods they buy. Price increases are the only response they have.”