The number of people out of work and claiming work-related benefits in the UK jumped 23% to 2.8 million last month as the coronavirus crisis forced thousands of businesses to close.
Highlighting the impact of the pandemic on the the workforce, the latest benefit figures for May found that the number of jobcentre claimants increased from 1.24 million in March, representing a 126% increase since the beginning of the lockdown.
The number of people on UK payrolls fell by 2.1% or 612,000 in May, compared with March. Meanwhile, the total number of hours worked on average each week fell a record 8.9% in the three months to April 2020.
Major job cuts announced so far
The coronavirus lockdown has virtually halted international travel and tourism, hitting airlines and other travel companies, aerospace and auto manufacturers and oil companies hard.
As these businesses adjust to dramatically reduced revenue projections, job losses are starting to mount alarmingly. More than 40,000 redundancies have already been announced across these sectors, with more than 10,000 likely to be in the UK.
The jet-engine manufacturer has confirmed that 3,000 job cuts, of a planned 9,000 worldwide, will be made in the UK. Rolls-Royce will make the first round of redundancies through a voluntary programme, with about 1,500 posts being lost at its headquarters in Derby, as well as 700 redundancies in Inchinnan, near Glasgow, another 200 at its Barnoldswick site in Lancashire and 175 in Solihull, Warwickshire.
The luxury carmaker intends to shrink its workforce by almost a quarter, slashing 1,000 roles through a voluntary redundancy scheme. The majority of Bentley’s 4,200 workers are based in Crewe, Cheshire.
Aston Martin Lagonda
The Warwickshire-based luxury car manufacturer has also announced 500 redundancies.
The oil company plans to make 10,000 people redundant worldwide, including an estimated 2,000 in the UK, by the end of the year. The BP chief executive, Bernard Looney, said the majority of people affected would be those in office-based jobs, including at the most senior levels. BP said it would reduce the number of group leaders by a third, and protect the “frontline” of the company, in its operations.
The UK flag carrier is holding consultations to make up to 12,000 of its staff redundant, a reduction of one in four jobs at the airline. BA intends to cut roles among its cabin crew, pilots and ground staff, while significantly reducing its operations at Gatwick airport.
Richard Branson’s airline is to cut more than 3,000 jobs, more than a third of its workforce, and will shut its operations at Gatwick.
The airline has announced plans to cut 4,500 employees, or 30% of its workforce.
The Irish airline intends to slash 3,000 roles and reduce staff pay by up to a fifth.
The shipping firm intends to cut more than a quarter of its workforce, a loss of 1,100 jobs. The company, which operates passenger ferries between Dover and Calais, and across the Irish Sea, as well as Hull to Rotterdam and Zeebrugge, will initially offer employees voluntary redundancy.
The owner of British Gas is to slash 5,000 jobs, saying it was looking to cut costs by simplifying its business structure. The company is removing three layers of management, with more than half of the job losses falling on leadership roles, including half its 40-strong senior team.
A major supplier of material for catalytic converters in cars, Johnson Matthey announced plans to make 2,500 redundancies worldwide, or 17% of its total workforce. The group said it was the result of the pandemic and the uncertain outlook for the car industry.
Voluntary redundancy has been offered to all of its 7,000 direct employees after coronavirus wiped out its passenger traffic.
Job vacancies also fell to their lowest level on record and inflation-adjusted pay fell in real terms for the first time in April since January 2018, according to the latest figures from the Office for National Statistics.
However, the unemployment rate remained steady at 3.9% in April, illustrating the cushioning effect of the government’s furlough scheme, which has protected more than 8m jobs.
A steep rise in unemployment was averted in March and April after the government introduced a series of grants and subsidies.
Thousands of companies were forced to close down and mothball their businesses in March following the introduction of the lockdown, prompting the Treasury to agree to pay up to £2,5000 a month of wages for workers who were sent home.
In the three months to March, the unemployment rate had only climbed 0.1 percentage points on last year to 3.9%.
Jonathan Athow, the deputy national statistician for economic statistics at the ONS, said: “The slowdown in the economy is now visibly hitting the labour market, especially in terms of hours worked.
“Early indicators for May show that the number of employees on payrolls were down over 600,000 compared with March.
“The claimant count was up again, though not all of these people are necessarily unemployed.”
He added: “More detailed employment data up to April show a dramatic drop in the number of hours worked, which were down almost 9% in the latest period, partly due to a 6 million rise in people away from work, including those furloughed.”
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