Now a jobs meltdown
A third of firms say they will be forced to axe staff in months
ONE in three Scottish firms expects to axe jobs in coming months amid growing fears of a long-lasting economic crisis.
Business leaders have warned of a ‘reckoning’ ahead as firms across sectors such as tourism, hospitality and retail become unviable because of a crash caused by the pandemic.
Nicola Sturgeon also cautioned yesterday that she expects a major downexpect turn and an acceleration of job losses as the UK Government’s furlough scheme comes to an end after propping up 736,500 Scottish jobs since it began in April.
A survey of 412 businesses by the Scottish Chambers of Commerce found that 13.4 per cent of companies are expecting to make redundancies over the next four weeks, rising to 26.3 per cent over the next three months and 32.1 per cent over the next six months.
Most of those planning cuts to cut their workforce by up to a quarter, while a small minority are planning to axe more than half of their staff.
The survey also found that the vast majority – 89 per cent – consider a local or national lockdown as their most significant concern.
Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: ‘We fear a reckoning as some companies, particularly in tourism, hospitality and retail, decide it is no longer viable to restart or continue. We must achieve a balance between looking at long-term ambitions and strategies for growth alongside concrete action in the months ahead to ensure we retain as many businesses and jobs as possible.’
She added: ‘The tracker survey highlights there is a need for more action by government to cut further the upfront costs of doing business.’
In the survey, businesses were asked what proportion of their existing workforce they intended to make redundant over the next six months.
While 67.9 per cent of respondents said none, 21 per cent expect to make up to a quarter redundant, while 6.9 per cent said between a quarter and half. A further 2.1 per cent said between half and three quarters and 2.1 per cent said between three-quarters and all their workforce.
During a visit to Scotland last week, Chancellor Rishi Sunak insisted he will not extend the furlough scheme beyond the end of October. Figures this week showed that the UK economy contracted by 20.4 per cent in the three months from April to June.
Miss Sturgeon said at her Covid briefing yesterday: ‘Our focus now should be on, firstly, making sure we are providing the most sustainable foundation for an economic recovery and that means keeping the virus under control because we see in Aberdeen right now what happens if we don’t keep the virus under control – restrictions have to be imposed again and that is the worst possible thing for businesses.
‘Then we have to make sure the right support is in place for businesses in the short term to make sure we’re supporting jobs through the short-medium term.’