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Summary
- Companies are resorting to layoffs despite government support
- As per the ONS the Unemployment Rate for February-April was 3.9%
- EasyJet PLC is planning to cut jobs of around 4,500 employees, which comprises 30% of its workforce
The unprecedented crisis of Covid-19 has severely impacted the economies around the globe, and businesses remained shut due to lockdowns with the fear of virus spread and people restricted themselves to essentials only, which led to mass redundancies across the business segments. Though the government came up with an ambitious initiative to prevent mass layoffs amid the coronavirus outbreak; it ensured 80 per cent of salaries of the millions of employees. But still, various companies are regularly announcing job cuts as they have lost revenue streams. Losing a job can be traumatizing as it takes a toll on mental health. There have been millions of people who have lost their jobs, whose source of income and livelihood have ceased and are facing financial crunch as a result of the Covid-19 pandemic. Everyone is wishing the pandemic to get over soon, the economy to revive and the economic conditions to bounce back to normal.
But the situation continues to remain grim, and there has been no major scope of employment generation programs during the lockdown, as was evident from the latest government data.
Latest Employment Data
The Office for National Statistics, on 16 June 2020, released a report on labour market overview of the UK. Some of the key points from the statistics are as follows:
- The number of employees in the UK on the payroll for the month of May 2020 was down over 600,000 as compared to that of March 2020.
- Employment Rate (February-April)
- The estimated employment rate for all people was 76.4% (0.3 percentage points up on the year)
- The estimated employment rate for men was 80.1% (0.2 percentage points down on the year)
- The estimated employment rate for women was 72.7% (0.7 percentage points up on the year)
- Unemployment Rate (February-April)
- The estimated unemployment rate for all people was 3.9% (0.1 percentage points up on the year)
- The estimated unemployment rate for men was 4.1% (0.1 percentage points up on the year)
- The estimated unemployment rate for women was 3.7% (unchanged as compared to previous the year)
- Hours Worked
- Total actual weekly hours worked in the UK decreased by 8.9%
- Economic Inactivity (February-April)
- The estimated economic inactivity for all people was 20.5% (0.3 percentage points down on the year)
- The estimated economic inactivity for men was 16.4% (0.2 percentage points up on the year)
- The estimated economic inactivity for women was 24.4% (0.8 percentage points down on the year)
- Vacancies
- There were an estimated 476,000 vacancies in the UK (March-May); this is 342,000 fewer than in the previous quarter (December-February)
Major Companies Job Cuts
Coronavirus pandemic has led some of the eminent companies such as Rolls-Royce, Centrica, BP, Bentley, Virgin Atlantica, Raynair, British Airways, Johnson Matthey, The Restaurant Group, Clarks, etc, to layoff major chunk of their workforce. Since the production activities have gown down drastically, there has been negligible revenue generation.
If we talk about the UK, lots of companies have announced major layoffs in the past couple of months. Let's have a look at some of the major companies who have announced job cuts:
HSBC Holdings PLC (LON:HSBA)
Founded in 1865, HSBC is one of the world's most famous and leading banks. It operates in over 64 countries, serving more than 40 million customers and having a total of 235,000 employees.
Recently, the Chief Executive of HSBC said that there would be 35,000 jobs lost due to Coronavirus impact. It employs 40,000 staffs in the UK out of which only a handful job cuts will take place, which will affect its head office operations, mainly in London.
HSBC Holdings PLC (LON:HSBA) on 18 June 2020, was trading at GBX 381.05 as at 11.54 AM GMT, down by 0.26 per cent from its previous close. The company's 52 weeks high/low range was reported at GBX 370.10 / 672.50. It was having a market Cap of GBP 77,808.48 million. The average volume traded was 8,024,008.
BP PLC (LON: BP.)
BP is an oil and gas company having multinational behemoth status. It has headquarters in London, UK and now its main focus is to become a net-zero company by 2050.
BP has planned to make 10,000 employees redundant, which includes 2,000 (estimated) in the UK. The major reason is the crash in oil prices due to lockdown.
BP PLC (LON: BP.) on 18 June 2020, was trading at GBX 313.50 as at 11.58 AM GMT, down by 1.03 per cent from its previous close. The company's 52 weeks high/low range was reported at GBX 233.70 / 557.90. It was having a market Cap of GBP 64,174.22 million. The volume traded was 8,678,255.
Rolls-Royce Holdings PLC (LON: RR,)
Rolls-Royce Holdings is a British engineering company. It was incorporated in February 2011 and is headquartered at Goodwood, England. It deals with aerospace and marine products.
Rolls-Royce Holdings PLC had announced 9,000 job cuts due to the pandemic, which has led to halting of the aviation industry, out of which 3,000 has been confirmed in the UK. It has been reported that this is not new for the company. Earlier also, it had laid off 4,600 employees as a part of management reorganization in 2018.
Rolls-Royce Holdings PLC (LON: RR.) on 18 June 2020, was trading at GBX 325.50 as at 11.59 AM GMT, down by 1.99 per cent from its previous close. The company's 52 weeks high/low range was reported at GBX 247.00 / 913.00. It was having a market Cap of GBP 6,412.84 million. The volume traded was 2,549,573.
Centrica PLC (LON:CNA)
Centrica PLC is an international energy services company. Its subsidiary companies include British Gas, Centrica Hive, Bord Gais, etc. The company aims at providing customer satisfaction, enabling to transform to a low carbon future.
The owner of Centrica PLC announced that they are planning to cut 5,000 jobs, removing three layers of its management. The company comprises of 27,000 employees out of which 20,000 belongs to the UK region.
Centrica PLC (LON:CNA) on 18 June 2020, was trading at GBX 41.56 as at 12:06 PM GMT, down by 3.03 per cent from its previous close. The company's 52 weeks high/low range was reported at GBX 30.21/ 93.50. It was having a market Cap of GBP 2,502.25 million. The volume traded was 7,904,779.
EasyJet PLC (LON:EZJ)
EasyJet is a 23-year-old British airline company, having its headquarters in Luton, the UK, operating in 30 countries.
EasyJet PLC is planning to cut jobs of around 4,500 employees, which comprises 30% of its workforce. It had employed 15,000 workers at the beginning of the year 2020. The employees are currently furloughed under the Government's Job Retention Scheme until October.
EasyJet PLC (LON:EZJ) on 18 June 2020, was trading at GBX 793.00 as at 12:08 PM, up by 1.39 per cent from its previous close. The company's 52 weeks high/low range was reported at GBX 475.00 / 1,552.00. It was having a market Cap of GBP 3,146.68 million. The volume traded was 1,490,021.
