More than HALF of medium-sized businesses planning to axe jobs

More than half of medium-sized businesses are planning to make job cuts as Rishi Sunak prepares to close the Government’s furlough scheme at the end of October.   

A new survey showed many firms are expecting to make at least some of their workforce redundant as the Chancellor removes state subsidies for wages. 

Research conducted by business advisory company BDO found nine out of 10 businesses had already axed up to a fifth of their staff. 

But the end of furlough means many more job losses are expected in the coming months. 

Fewer than 10 per cent of firms which responded to the survey said they had no plans to make job cuts.

Rishi Sunak will close the Government’s furlough scheme at the end of October. The Chancellor is pictured during a visit in London on September 2

The furlough programme has seen the Government pay 80 per cent of an employee’s monthly wages up to a maximum value of £2,500.

From this month the Government will only contribute 70 per cent of wages,  reducing to 60 per cent in October, before the furlough scheme is closed. 

Leaders of medium-sized businesses have expressed concern over funding arrangements, with a third saying they can’t continue trading for longer than six months based on their current outlook, according to the BDO survey.

Two out of five respondents reported the same or an increase in revenues compared to the same time last year. 

Paul Eagland, managing partner at BDO, said: ‘These figures highlight some of the very tough challenges and decisions businesses are faced with.

‘The leisure and hospitality sector, in particular, is facing the double-whammy of both the furlough support and Eat out to Help Out schemes ending.

‘The Government took bold action with its furlough policy which has undoubtedly saved many jobs and businesses.

‘However, the harsh reality is that these are unprecedented times and we would encourage the Government to introduce policies that will help UK business survive and ultimately compete internationally.

‘Other governments around the world are and will be introducing policies to protect their businesses.

‘We must not fall behind, particularly with Brexit looming.’ 

Official statistics published last month suggested the UK economy was still heavily reliant on furlough. 

One in eight workers were recorded as still being on furlough in the Office for National Statistics’ fortnightly survey into the impact of coronavirus on UK firms.