Redundancies to reach 600,000 in 2009 & no pay rises for many

The Chartered Institute of Personnel and Development (CIPD) is warning that 600,000 face redundancy in 2009 and are prediciting that it will be the worst year for jobs in two decades. It believes that the next 3 months, from New Year to Easter, will be the worst time for redundancies since 1991 with 300,000 being made redundant.

Woolworths have started closing their doors for the last time and as a result around 27,000 workers there are facing redundancy.

With other retailers like MFI already in administration, others like Adams just entering and more likely to follow, the prospect of further redundancies looms large.

John Philpott, the CIPD’s chief economist said ‘Overall the 18-month period from the start of the recession in mid-2008 until the end of 2009 will witness the loss of around three quarters of a million jobs, equivalent to the total net rise in employment in the preceding three years.’

A survey by the CIPD also showed that over one quarter of workers surveyed don’t expect a pay rise in 2009, many expect a pay freeze and some a pay cut.

Miles Templeman at the Institute of Directors said ‘We are seeing wages being cut in a variety of sectors: manufacturing, engineering, catering but also white-collar professions such as law and accountancy.’

A pay cut has already been implemented at JCB, manufacturer of construction vehicles, where staff agreed to a pay cut to reduce the proposed number of redundancies.

The British Chambers of Commerce (BCC) is also adding to the gloomy outlook by calling for the national minimum wage to be kept at its current level in 2009. David Frost, the BCC Director General, said ‘Most businesses are prioritising survival at the moment. A rise in the minimum wage would not help firms hold on to staff and would simply add to unemployment.’