Manufacturers plan swingeing job cuts

A quArter of Britain’s manufacturers plan to cut jobs over the next six months, according to an industry poll.

One million companies in the uK have already applied for taxpayer support under the Government’s Job retention Scheme to pay the wages of 8.4m furloughed staff.

But there are growing fears that many of these firms are biding their time, and will have to announce job cuts anyway.

A string of companies including British Airways, tui, Virgin Atlantic and easyjet have furloughed thousands of staff, shortly before announcing mass redundancies.

But a survey of 224 companies published today by manufacturing trade body Make uK suggests the same thing could happen in other sectors of the economy.

It found a quarter of manufacturing firms

– ranging from car makers to small engineering companies – are preparing to make redundancies over the next six months, with less than a third ruling any out.

Of those planning to shed jobs, more than a quarter believe they will have to get rid of half their staff and almost a third are planning to axe up to a quarter.

Although the lockdown is being lifted gradually, many sectors – including manufacturing, retail, aviation and tourism – are still facing a slump in demand.

Stephen Phipson, chief executive of Make uK, said: ‘these figures make for awful reading with the impact on jobs and livelihoods across the uK.’

It came as a separate report released by the Office for National Statistics warned nearly half of firms in Britain which have temporarily shut down because of the lockdown are unsure when they will reopen.

Around one in five businesses went into hibernation, according to its survey, with 14pc of them expected to resume business in the next two weeks.

A further 10pc said they expected to reopen in two to four weeks’ time and 31pc expected to kick-start operations again in more than four weeks’ time. Almost half (46pc) said they were unsure when they would resume trading.

Chancellor rishi Sunak is expected to announce reforms to the Job retention Scheme today which will include forcing employers to contribute to the salaries of furloughed staff from August. this is designed to keep a lid on the cost of the bailout, which has already hit £15bn.

But it has fuelled concerns that many companies will not be able to contribute to salaries of furloughed staff, and will have to lay them off instead.

BOdyCOte is slashing 700 jobs after work dried up in its aerospace and automotive arms. the industrials group, which applies heat-protective coatings to everything from car brakes to oil drilling equipment, is aiming to save £45m a year by cutting 13pc of its workforce and closing some of its plants.

revenues shrank by 12pc to £216m in the first four months of the year and by around a third just in April. Plane and car manufacturing has been brought almost to a standstill by coronavirus.