The number of redundancies proposed by employers in Great Britain rose in 2023 as they battled weak demand and rising costs, but remained below pre-Covid levels.
According to figures from the Insolvency Service compiled by the Office for National Statistics, there was a 58% increase in the number of redundancies planned in 2023 (278,149), compared with 2022 (176,149).
However, the volume of expected redundancies was lower than before the pandemic. In 2019 around 353,000 redundancies were notified to the government.
Ellie Henderson, an economist at Investec, told The Times that government support for employers during the pandemic “artificially prolonged the life of struggling companies, effectively preventing redundancies that would likely have happened had the schemes not been in place”.
Proposed redundancies
Sharp increase in firms at risk of insolvency
The number of redundancy notices filed with the government increased by 54%, according to the newspaper. Employers are required to notify the government via an HR1 form if they intend to make 20 or more staff redundant.
Figures published by the ONS last week showed that HR1 forms received by the government in December 2023 indicated that employers expected to make 16,233 redundancies. This was higher than the figure for a year earlier (12,232) but lower than the figure notified in November 2023 (32,694).
Across Great Britain, 190 employers submitted HR1 forms in December, up from 173 a year earlier. The most redundancies were expected in public administration, education and health (4,553), spread across 28 employers.
Employers in banking and finance also expected to make significant redundancies. In December 2023 they informed the government of plans to lay off 3,583 workers, across 50 employers.
Employers including Citigroup and Barclays have recently announced redundancies, while Tata Steel has said it is set to make 3,000 people redundant at its Port Talbot works in South Wales.
The figures were published as corporate restructuring firm Begbies Traynor warned that 47,477 UK businesses are facing collapse, after the number in “critical” financial distress increased by a 25.9% in just a few months.
Its latest Red Flag Alert report said there was an increase in firms in financial distress in every monitored sector between Q3 and Q4 2023, but the sharpest increases were seen in construction (up 32.6%), real estate and property (24.7%) and support services (23.6%).
Julie Palmer, a partner at Begbies Traynor, said: “After a difficult year for British businesses that was characterised by high interest rates, rampant inflation, weak consumer confidence and rising and unpredictable input costs, we are now seeing this perfect storm impacting every corner of the economy.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
“As we saw in the previous quarter, the strain being placed on companies has extended well beyond the consumer facing businesses with bellwether sectors, like construction and real estate, now in serious jeopardy as over 15,000 businesses face high risk of failure.”
Employee relations opportunities on Personnel Today
Browse more Employee Relations jobs
