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Four in 10 companies fear job losses by December, survey shows
29 September 2020, 00:04
Nearly a quarter of companies might go bust within 12 months if there is a second national lockdown.
Close to half of all UK businesses think they might have to reduce headcounts before the end of the year, new figures show.
Researchers found that 42% of small and medium sized enterprises think they will have a smaller workforce in December than they did in September.
An online survey from Censuswide and Virgin Money also showed that companies are worried about their futures, with nearly a quarter thinking they might go out of business in the next year if there is a second wave of Covid-19.
The figures speak to a gloom in the business world, as companies prepare for what to do when the Government’s furlough scheme ends on October 31.
However, the survey was carried out before Chancellor Rishi Sunak announced a raft of new measures which he hopes might help save jobs.
The Treasury promised last week to pick up part of the tab if companies cannot take their workers back full-time.
But the data also shows that many companies were not tempted enough by previous Government measures to hold onto their staff for just another couple of months.
In August Mr Sunak promised companies whose staff had been furloughed that they would get £1,000 per employee they brought back and kept on the books until the end of January.
Businesses who have parted ways with the workers by December will therefore not be in line for the cash.
Researchers asked 501 decision makers at small and medium sized enterprises between September 4 and September 7 about their plans for the future.
The online survey found that 17% of businesses think it is very or somewhat likely that they will be forced to close in the next 12 months.
“If there is a second national lockdown, that figure rises to 24%.
“The results make for sober reading, but they are unsurprising given the extraordinary disruption of the last six months,” said Gavin Opperman, group business director at Virgin Money.
He added: “While the Chancellor’s newly announced schemes may help stave off the worst of the closures over Christmas, both the Government and the banks need to look for pragmatic ways to provide support for SMEs and the economy moving forward.”