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60% of mid-sized businesses plan to make redundancies

07 September 2020

MID-SIZED BUSINESSES FACING JOB CUTS POST-FURLOUGH

  • 60% of the UK’s medium-sized companies plan to make redundancies once the Coronavirus Job Retention Scheme ends in October.
  • 97% of medium-sized businesses have already made redundancies with just over half (54%) cutting between 11% and 20% of their workforce.
  • 75% of those polled now have their offices or place of work either partially or fully open.

More than half (60%) of the UK’s medium-sized businesses are planning redundancies as a result of the Government’s Coronavirus Job Retention Scheme coming to an end in October, according to new research from accountancy and business advisory firm, BDO.

BDO’s monthly Rethinking the Economy survey of 500 medium-sized businesses across the UK reveals that 89% of those surveyed have already made up to a fifth of staff redundant, with more job losses expected in the coming months. Less than 10% have no plans for any job cuts at all.

Leaders of mid-sized businesses have also expressed concern over funding arrangements, with a third (32%) reporting that as it stands, they can’t continue trading for longer than six months.

Mid-sized businesses are vital to the UK economy. While they account for less than 1% of all UK businesses they generate £1.4trillion in revenues and almost 8 million jobs.

The research does indicate some signs of resilience and recovery in the mid-market, with more than a third (41%) recording the same or an increase in revenues compared to the same time 12 months ago. Of those surveyed, over half (57%) have either partially or fully reopened their offices or place of work, with 18% remaining open throughout the pandemic.   

Despite a challenging period, many medium-sized businesses have adapted quickly with over a third (33%) investing in new technology and more than a quarter (29%) launching new products or services as a result of the pandemic. 

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.

“We would ask the Government to ensure policies support mid-sized businesses; they are vital to the UK and provide around one in three jobs.  Unfortunately they can often fall through the cracks of government policy which is traditionally aimed at larger or smaller businesses.”

ENDS

Note to editors

Medium-sized businesses are defined as businesses with revenue between £10-£350m. This survey was conducted by Censuswide on behalf of BDO LLP in August 2020.

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high-growth businesses that fuel the economy. 

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed. 

BDO LLP

BDO LLP operates in 17 locations across the UK, employing nearly 5,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn.  

Contacts

Emma Ordidge
Senior PR Adviser BDO
[email protected] 

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