UK layoffs drop after support scheme extension

Statistics from the UK's Insolvency Service indicate that planned redundancies have dropped to their lowest level since March, most likely in response to the government's extension of its job retention scheme subsidizing 80 percent of employees' wages. The scheme was originally planned to end on October 31 this year, but due to concerns that layoffs would skyrocket, it was extended to April 30, 2021.

According to the figures, which were released this month in response to a BBC Freedom of Information request, approximately 550 employers reported in November that they were planning to cut 20 or more jobs, totalling around 36,700 redundancies. However, the numbers do not include companies that are cutting less than 20 jobs, which do not have to notify the government. This was down from almost 1,900 employers reporting 156,000 planned cuts in June.

Based on corresponding figures from the UK's Office of National Statistics, planned redundancies are reflected in actual layoffs in the following quarter—hence the peak of planned redundancies in June and July was followed by a peak of 370,000 layoffs between August and October, the highest in 25 years and topping even the layoffs during the global financial crisis in 2008. While the current figures suggest that fewer jobs will be lost in the next few months, the spread of the new coronavirus variant and the resulting travel bans and border closures may worsen the situation again in the coming year.