1 in 4 employers plan job cuts as Rachel Reeves taxes hit
A perfect storm for businesses has tanked the number of companies planning to hire more people
April saw Labour's increase on taxes for employers combined with global market uncertainty when President Donald Trump started dealing out tariffs. The perfect storm has drastically swayed hiring and firing decisions within businesses at large, a new survey has found.
One in four employers plan to make redundancies in the next three months and the number of employers planning to hire more people this summer has dropped to a record low only surpassed by the pandemic. The retail sector could be especially affected.
This is higher than the 21% recorded in Autumn. The Chartered Institute of Personnel and Development (CIPD) surveyed 2,000 businesses as part of its latest Labour Market Outlook report.
The report also found 27% of employers had a redundancy programme in the last 12 months and half offered enhanced packages above and beyond what the law requires. Employers with less than 250 workers were far more likely to offer the statutory redundancy pay.
Only one in 10 retail employers plan to increase staff levels over the summer while 30% expect a drop in staff numbers, reports the Express.
In response to these staggering figures, the CIPD is urging the government to 'consult with employers and business bodies to limit the potential impact the Employment Rights Bill could have on employer's hiring plans as businesses face mounting external pressures'.
James Cockett, senior labour market economist at the CIPD, said: 'It was always going to be a huge change for employers but they're operating in an even more complex world now.
'It's vital the government works closely with employers to balance the very real risk of reductions in investment in people, training and technology with their desire to reduce poor employment practice.'
Andrew Griffith MP, Shadow Secretary of State for Business and Trade, said: "Alongside making families £3,500 worse off, Labour's Jobs Tax is crushing confidence, killing jobs, and pushing employers to the brink. Under Labour, the economy has flatlined and with businesses under mounting pressure, things can only get worse.
"This report only confirms what we hear daily from the shop floor to the boardroom: confidence has collapsed. Labour can't understand why, because their cabinet has zero business experience.'
A Treasury spokesman told the outlet: 'In a period of global uncertainty this government is delivering stability for business. Trade deals with India and the US show the benefits of our cool-headed diplomacy.
'We have provided business rates relief, capped corporation tax, and are protecting the smallest businesses from the employer National Insurance increases. And we've now seen four interest rate cuts since July, making it cheaper for businesses to borrow.'
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