Will mass redundancies become more common?

Over the last year, we’ve heard many times that the job market is heavily weighted in favour the jobseeker, given how many hard-to-fill vacancies remain open.

However, a recession looks to be upon us, and some of the biggest companies in the world have reacted to this uncertainty.

Alphabet, Google’s parent company, have announced that it is letting 12,000 people go, which equates to around 6% of its global workforce. Microsoft, another big player, also plans to make 10,000 employees redundant—around 5% of its employee contingent.

Both firms inflated their workforces in the pandemic as everyone rushed to live their lives online during lockdowns. They claim that scaling back their employee numbers simply takes them to where they were before the virus appeared. This doesn’t make their decisions any less worrying.

Companies usually move forward and achieve growth year on year, particularly ambitious ones like Google and Microsoft. Even if the redundancies they plan will simply take them back to where they were a few years ago, this move suggests that they don’t expect to see any growth over the next few years to warrant keeping their more recent hires on.

At the other end of the rainbow, small businesses are going through the mill at the moment. Decisions they make could mean the difference between staying in business and jacking everything in. Labour shortages represent just one challenge; they also have soaring energy, running and material costs, as well as the prospect of less revenue. Everyone’s feeling the pinch and experts predict that the general public will spend less over the coming years, as their disposable income is spent on escalating household bills and higher food and travel costs. You can’t squeeze both ends of the same pipeline; if a business’s turnover reduces significantly and its costs rise uncontrollably, there will come a point where any profit margin disappears. This is when most firms, understandably, shut up shop.

To compensate, according to a study by Vodafone Business UK, small business owners are working, on average, 10 hours more in their business in a bid to make ends meet. It’s a bleak outlook, certainly.

Small businesses will undoubtedly be hit harder than the likes of Google and Microsoft. In the UK, SMEs make up 99% of the business population. Whilst it’s incomprehensible that they will all go to the wall, the vast majority will face the issues I’ve highlighted. Unless they have savings to fall back on, a rich investor or they can diversify into more profitable markets, they may struggle.

What can the general public do to save them?

It may be slightly less convenient for consumers, but shop locally where you can. If you don’t use your town’s butcher, baker or candlestick maker, they will disappear completely. And when Sainsbury’s or Asda et al sport empty shelves, where will you turn then? We need to prioritise produce and products made or harvested across the UK—not just to ensure continuous provision, but so that we feather the nests of UK companies rather than huge chains and conglomerates from overseas, most of whom don’t pay tax/contribute to our economy. Looking after our own will benefit all of us in the long run.

The vacancies that are hard-to-fill currently are those within sectors that represent unsociable hours and poor pay. Whether the ex-employees of Google and Microsoft fill them will remain to be seen; after all, if employers in your chosen sector are cutting back across the board, a job is a job. Even an unappealing position will pay (most of) the bills.