Job losses could be set to double

Feb 15 2010 by Karen Dent, The Journal

THE number of job losses looks set to double as the outlook for employment worsens and cuts spread to the public sector, it was predicted today.

A survey of more than 700 employers also revealed a “substantial“ fall in employment intentions among public sector organisations, marking a “difficult” first quarter of the year for jobs.

The Chartered Institute of Personnel and Development (CIPD) said the jobs market was still “on the ropes”, with a number of concerns ahead, including more outsourcing of work.

The study found that employers planned to cut their staff by over 6% in the current quarter. More employers were planning to reduce staff than hire new workers, and the outlook was particularly “bleak” in the public sector.

Public administration and defence will be particularly badly hit for jobs, the CIPD said.

John Philpott, the CIPD’s chief economic adviser, said: “The UK jobs market is still on the ropes, with a public sector fall in employment now a reality as it feels the impact of the longest recession in modern times.

“Despite the jobs market proving resilient in recent months, this represents a mere pause for breath with the number of redundancies easing in the private sector and spending cuts yet to be felt by large swathes of the public sector.

“Unfortunately, there are more testing rounds ahead. With many private sector companies looking to move jobs abroad in an attempt to find the right balance between skills, quality and cost reduction, the jobs market needs all the continued support and protection it is getting from the Government.”

The survey showed that one in 10 private firms planned to outsource jobs abroad this year to countries including India and Eastern Europe.

Alan Downey, head of public sector at KPMG, which helped with the research, added: “These figures clearly show that the starting gun for a public sector recession has been fired.”

The report was published ahead of new unemployment figures on Wednesday which will show that around 2.5 million people are out of work.