The pandemic has resulted in a massive breakdown of the UK’s economy. It’s expected the country will take several years to overcome job losses due to the Covid-19 pandemic. A record number of employees have been made redundant during lockdowns in the past year.
In a report last week, the Office of National Statistics (ONS) disclosed that the country’s unemployment rate had reached 5%, a new record indicating that approximately 1.7 million people are currently jobless in the UK.
Andrew Haldane, the Chief Economist from Bank of England, had said in a statement “The country is in its highest recession period in the last 300 years, luckily, the furlough scheme has benefitted 10 million employees and 1.2 million companies. Employees are in a state of fear that if the government withdraws the furlough scheme, then millions of workers will be made redundant. However, the government has decided to lift the scheme by March 2021.“
A huge number of employees have been laid off due to the pandemic. The Financial Times published a report stating, “418,000 people have fallen out of work since the start of the coronavirus pandemic, taking the total number of unemployed people to 1.72m.”
Last week The Arcadia Group sold their four biggest brands to Asos for £265 million. This has resulted in a massive panic among the retail workers who were working for the Arcadia Group. Needless to say, Asos has not acquired the physical stores, and so those stores will be shut down, leaving thousands without a job. A similar incident took place when Boohoo announced its acquisition of Dorothy Perkins and Arcadia brands for £25.2 million. The online platform has not shown its interest to use physical stores. Most of these job losses took place in the retail, hospitality, and the aviation industries. The primary reason behind these job losses is to lower sales and reduce operational costs (as during lockdown, the entire industry was shut down), and a lack of financial aid from the government.