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UK firms slash 11,000 jobs in two days in retail and aviation UK firms slash 11,000 jobs in two days in retail and aviation
(32 minutes later)
At least 11,000 people in the UK are set to lose their jobs after a raft of firms announced cuts in the past 48 hours.At least 11,000 people in the UK are set to lose their jobs after a raft of firms announced cuts in the past 48 hours.
The cuts are mainly being made by High Street retailers and in aviation - two of the sectors hardest hit by the coronavirus lockdown.The cuts are mainly being made by High Street retailers and in aviation - two of the sectors hardest hit by the coronavirus lockdown.
John Lewis has said it will close stores but has not confirmed how many jobs will go.John Lewis has said it will close stores but has not confirmed how many jobs will go.
Topshop owner Arcadia and Harrods said they planned a total of 1,180 job cuts.Topshop owner Arcadia and Harrods said they planned a total of 1,180 job cuts.
Where are the cuts falling?
Others lay-offs to have been announced include:Others lay-offs to have been announced include:
WH Smith, Bensons for Beds, Wrights Pies, tableware-maker Steelite International, the Adelphi Hotel in Liverpool and Norwich Theatre Royal have also announced plans to reduce staff. In addition, WH Smith, Bensons for Beds, Wrights Pies, tableware-maker Steelite International, the Adelphi Hotel in Liverpool and Norwich Theatre Royal have also announced plans to reduce staff.
The redundancy plans come ahead of the government's planned paring-back of the furlough scheme, which is currently paying 80% of the pay of staff kept from their work. What do employees say?
Businesses have been hit hard since the UK went into lockdown on 23 March, and even though shopping and travel restrictions are gradually being relaxed, consumer demand is likely to remain depressed for some time.
That means more job cuts could be on the way.
James Phillips, a mechanical engineer, told the BBC he feared he could be made redundant.
"I've been on furlough now since March, and I had a letter through the post this week saying I've got a redundancy consultation meeting, to discuss being made redundant, from a company who are a nationwide engineering company.
"I'm three months away from having a baby, and I was about to sign for a mortgage this week on a new property, so it's impacted me massively, really. Everything's been put on hold."
Why so many job losses now?Why so many job losses now?
From next month, employers must pay National Insurance and pension contributions, then 10% of pay from September, rising to 20% in October. For most businesses, staffing is the highest cost, and many have been using the government's furlough schemes to keep workers on.
"So there is already a cost to the employer from just a month's time, said BBC business correspondent Simon Gompertz. But the programme - which is paying 80% of the wages of more than 9 million staff - will start to be pared back from next month and will end in October.
"That must concentrate minds. Then the cost escalates in September. As firms have to consult for 30-45 days when making redundancies, many will feel that now is the time to act
"Smaller firms, having to give just 30 days' notice of redundancy, might think now is the time to act. "There is already a cost to the employer from just a month's time," said BBC business correspondent Simon Gompertz.
"Larger employers, planning bigger layoffs, will be eyeing that escalating wage bill and maybe thinking the sooner they move the better.""Larger employers, planning bigger layoffs, will be eyeing that escalating wage bill and maybe thinking the sooner they move the better."
Another reason that has been suggested is that companies with financial quarters ending last month want to show shareholders they are taking action over poor figures, he added. What have firms said?
'Too much space' In an email to staff, Harrods' managing director Michael Ward said the department store was making its cuts with a heavy heart.
John Lewis's plans were first shared with staff at the company, which is owned by its employees. The number of stores and jobs which will go has yet to be decided. "Due to the ongoing impacts of this pandemic, we as a business will need to make reductions to our workforce."
Cuts could also include the smaller of its two head office buildings in London.
"The reality is that we have too much store space for the way people want to shop now and we have shared this with our Partners," the company said in a statement.
"As difficult as it is, it is highly unlikely we will reopen all our John Lewis stores. However, no decision has been made and any details would be shared with Partners first by the middle of July."
The company is unlikely to pay its workers a bonus next year, it added.
It follows a warning from the company in March that it could close shops, as a plunge in profits forced it to cut staff bonuses to their lowest level in almost 70 years.
John Lewis, which also owns Waitrose, launched a review of the business, which it said would involve "rightsizing" its stores across both brands.
Separately, Upper Crust owner SSP Group said it was having to make cuts across its UK outlets and head office, because it was struggling in the face of a reduction in passenger travel.
It's hard to keep up with the scale of job cuts and restructurings in retail and hospitality right now.
Businesses are being forced to cut costs dramatically to survive, so that inevitably means job losses. It also a sign that these businesses are not expecting any quick economic rebound. Instead, they're planning for tough times to continue.
There are likely to be thousands more to come in the weeks and months ahead. Even though non-essential shops have been open for more than two weeks now, with hospitality set to follow on Saturday, the scale of the latest job losses underlines the challenges these sectors are facing.
Aerospace giant Airbus says it plans to cut 15,000 jobs as it deals with the effects of the coronavirus crisis.
It will cut 1,700 jobs in the UK, along with thousands more in Germany, Spain and elsewhere.
EasyJet said on Tuesday it had begun consultations on plans to close bases at Stansted, Southend and Newcastle.
The Unite union said nearly 1,300 UK crew members faced losing their jobs, while pilots' union Balpa said it had been told by EasyJet that 727 of its UK-based pilots were also at risk of redundancy.
About 600 workers will lose their jobs after shirtmaker TM Lewin announced on Tuesday it will close all 66 of its UK shops.
The luxury retailer Harrods has announced it is cutting up to 680 jobs because of the impact of the coronavirus.
In an email to staff, managing director Michael Ward said Harrods was slashing up to 14% of its workforce of 4,800 people.
He wrote: "With a heavy heart, today I need to confirm that due to the ongoing impacts of this pandemic, we as a business will need to make reductions to our workforce."
Lost customers
He said it would take a "drastic improvement in external conditions" for Harrods to recover and return to growth.He said it would take a "drastic improvement in external conditions" for Harrods to recover and return to growth.
"The necessary social distancing requirement to protect employees and customers is having a huge impact on our ability to trade, while the devastation in international travel has meant we have lost key customers coming to our store and frontline operations," he added. John Lewis, which has not said which shops will close, said it was "highly unlikely" it would reopen all of its stores in the future.
Mr Ward said the job cuts would come "in parts of the business that have been most affected by the challenges of lockdown". "The reality is that we have too much store space for the way people want to shop now," the company said in a statement.
Arcadia, owned by billionaire Philip Green, said 500 of its 2,500 head office workforce would be cut. Topshop owner Arcadia, which is slashing a fifth of its head office workforce, also blamed the pandemic for the cuts.
"Due to the impact of Covid-19 on our business including the closure for over three months of all our stores and head offices, we have today informed staff of the need to restructure our head offices," the company said."Due to the impact of Covid-19 on our business including the closure for over three months of all our stores and head offices, we have today informed staff of the need to restructure our head offices," the company said.
Are we likely to see more cuts?
It's hard to keep up with the scale of job cuts and restructurings in retail and hospitality right now.
Businesses are being forced to cut costs dramatically to survive, so that inevitably means job losses. It also a sign that these businesses are not expecting any quick economic rebound. Instead, they're planning for tough times to continue.
There are likely to be thousands more to come in the weeks and months ahead.
Even though non-essential shops have been open for more than two weeks now, with hospitality set to follow on Saturday, the scale of the latest job losses underlines the challenges these sectors are facing.
Why is retail being hit so hard?
Retailers were already struggling before the coronavirus due to changes in shopping habits as consumers buy more online, as well as pressures from staff, property rent, and tax costs.
But the coronavirus crisis has placed huge pressure on an already weakened sector.
The numbers of people going to shops saw unprecedented lows as people stayed at home to try to slow the spread of the virus.
And what about aviation?
Airlines have also been hit hard by global lockdown measures and travel restrictions.
While planes aren't flying, airlines aren't making money, but they still have funds flying out of the door.
And firms that rely on airlines flying, such as commercial aerospace businesses, have decreased production.
Along with cuts by Airbus and EasyJet, British Airways has announced plans to cut 12,000 of its workforce.
Meanwhile, engineering giant Rolls-Royce, which makes jet engines, will cut 3,000 jobs across the UK.