Analysis by The Telegraph has revealed the shocking scale of the coronavirus induced jobs crisis, with Covid-19 delivering a crushing blow to the UK’s aviation and consumer sectors as the industry's key players announce more than 85,000 job cuts.
Across the entire economy, major companies are considering axing the jobs of some 112,964 workers, our analysis found. Nearly half of these layoffs were announced in June, with 26 companies considering cutting up to 55,773 jobs in total – four times higher than the number of announced job cuts in May (13,714).
The findings – from an analysis of corporate layoff announcements made since the beginning of March – show the challenge facing the Government as it tries to avoid mass unemployment while winding down the UK's £19.6bn furlough scheme.
Aviation and aerospace industries bear the biggest brunt
Since coronavirus has virtually wiped out demand for air travel, British aviation and aerospace firms have been on the receiving end of a walloping and have announced 48,500 UK jobs could be axed.
Airlines and airports have also been hardest hit on a proportional basis, with those announcing layoffs set to lose on average a quarter of their UK workforce.
Some of the industry’s biggest and best-known names have been forced into culling large portions of their staff. This includes British Airways, which stated in April that it would be slashing as many as 12,000 workers, amounting to more than a quarter of the airline's 45,000-strong workforce, and plane-maker Airbus, which is set to cull 15,000 jobs globally and 1,700 in the UK.
So far the UK Government has declined to provide the struggling industry with any targeted help beyond the standard business support schemes offered across the wider economy.
“It’s no surprise that these job losses are so high when we saw the complete shutdown of international aviation and Governments around the world introducing a whole swathe of border and travel restrictions,” says Tim Alderslade, chief executive of Airlines UK, the trade body for UK registered airlines.
“The difference between the UK and our international rivals is that their Governments have intervened with generous support packages to help their airlines through this crisis... Ministers here have refused to even countenance sectoral measures that go beyond the economy-wide support already announced.”
Raft of retail and hospitality firms enter administration
Britain’s vast retail and consumer industry has also been dealt a hefty blow by coronavirus and the nationwide lockdown.
So far July has seen 19 companies announce 23,219 job cuts across the economy, with over two thirds of these in the retail and hospitality sectors.
A number of the high street’s most well-known names have already collapsed into administration, including Cath Kidston, Laura Ashley, Oasis and Warehouse and Victoria Secret – with some 37,975 jobs at major firms in the firing lines across the industry as a whole.
Those companies that remain face crippling social distancing measures that will make it enormously difficult for many of them to survive.
In his recent "mini-Budget" Chancellor Rishi Sunak announced measures to help the hospitality sector, including cutting the VAT rate to 5pc and offering a 50pc discount for diners to spur demand, while the two-metre rule has also been partially relaxed.
However industry experts have warned that this may not be enough. Kate Nicholls, chief executive of UKHospitality, said: “While we welcome the support from the Chancellor which has been far-reaching, providing a lifeline to many businesses and enabling them to survive to this point, it is patently clear that in order to make it through this crisis, and to participate in the recovery, on-going meaningful support will be required for some time.
“All the while there are restrictions in place that prevent these businesses operating at normal levels there needs to be support.”
Helen Dickinson, head of the British Retail Consortium, similarly said: “The Government must do more; retailers need support with rent so that they are not shouldered with unpayable debts. Without this, hundreds of thousands of jobs and high streets across the country will hang in the balance.”
Manufacturing, automotive, construction and service industries struggle
No corner of the workforce has been spared from the fallout, and the manufacturing, automotive, construction and non-financial service industries have all also seen their share of job cuts.
Centrica, the owner of British gas, has declared it will axe some 5,000 positions across the country, the third most of any company to have declared cuts in the UK.
Other major names include Rolls-Royce (3,000 cuts in the UK), Travis Perkins (2,500), DHL (2,200) and Jaguar Land Rover (1,100).
Business activity in these sectors plunged across April and May as manufacturing plants shut down, automotive factories closed their doors, construction site workers downed tools and real-estate agents were unable to offer house viewings.
The closely watched purchasing managers’ index (PMI) survey of companies came in at just 13.4 for the service industry and 32.6 for manufacturing – any score below 50 signals a contraction. These figures have since rebounded somewhat, but the recovery remains slow.
Tsunami of job losses as furlough nears its end
Firms have been heavily reliant on the Government’s taxpayer-funded furlough scheme, which has seen 9.4 million jobs preserved across the UK.
However the scheme is due to end in October, and experts have warned that a “tsunami of job losses” is poised to strike when it does. The Centre for Economics and Business Research (CEBR) has already warned that unemployment could peak at a record 3.3 million this year.
Based on our analysis here it looks like we could be well on our way to achieving that record.