U.K.’s Reopening Takes Place Amid Jobs Carnage Across Economy
U.K.’s Reopening Takes Place Amid Jobs Carnage Across Economy
(Bloomberg) --
U.K. Prime Minister Boris Johnson may be gradually reopening the economy after a lockdown to contain the coronavirus, but businesses from chemical manufacturers to airports are firing thousands of workers before any rebound has time to take effect.
British firms announced more than 7,500 job cuts on Thursday, as the pandemic hits earnings across several industries. The country will suffer the biggest economic slump from Covid-19 among developed nations, the OECD forecast the previous day, while its official death toll trails only the U.S. worldwide.
Utility Centrica Plc said it will eliminate 5,000 positions before the end of the year, about half of them senior managers, after the owner of British Gas was hurt by lower energy prices. London Heathrow started reducing a workforce of about 5,500 frontline staff after earlier cutting 500 management jobs. Manufacturer Johnson Matthey Plc plans to shed about 2,500 employees globally over the next three years.
The U.K.’s reliance on service industries makes the country vulnerable to job cuts as the lockdown ravages the economy and reduces demand for everything from travel to clothing. Almost a quarter of the country’s workers were furloughed at the end of May, some of whom will be vulnerable to losing their jobs if the economy doesn’t recover quickly.
The government supports at least 11.5 million jobs through its furloughing and self-employed plan, at a cost of 27 billion pounds ($34 billion) so far.
More details on the job cuts:
- Centrica will halve its senior leadership team
- Johnson Matthey is seeking additional annualized cost savings of at least 80 million pounds by the end of the 2022-2023 fiscal year, on top of a 120 million-pound program
- Heathrow Chief Executive Officer John Holland-Kaye previously warned that the U.K.’s two-week quarantine measure means that one-third of the airport’s 7,000 jobs are at risk
The U.K. auto industry is another to have started a severe downsizing, with Bentley Motors Ltd., McLaren Group Ltd., Aston Martin Lagonda Global Holdings Plc and car-distributor Lookers Plc announcing more than 4,000 combined job cuts earlier this month.
There was some better news on Thursday. CityFibre plans to provide as many as 10,000 people with jobs upgrading the U.K.’s digital network to full fiber, the firm said in a statement.
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