Redundancies in financial services are up 46 per cent in the last quarter as employers look to save money amid the prospect of a bleak economic winter.
Recessionary headwinds have “caught up” with hundreds of firms, forced to move on from desperately filling a shortage of staff, to letting existing employees go.
In figures exclusively shared with City A.M., it was revealed the number of planned redundancies in the UK has shot up to almost 42,000 in the last three months.
Based on data from the Office for National Statistics (ONS), analysis by employment law firm GQ|Littler showed overall that planned redundancies are up 15 per cent.
This comes as the UK enters a recession with inflation at 11.1 per cent, interest rates up and the cost of living biting for many firms and consumers, looking to save money.
In financial services, planned redundancies have rocketed by 46 per cent from the last quarter, up to 9,249 from 6,337.
This according to GQ|Littler was due to a decline in the number of mergers and acquisitions and corporate finance activities.
The decline has caused a slump at many financial services firms, leading to more redundancies.
The number of firms who plan on letting more people go has also gone up by 17 per cent to 641.
Another area which has been hard-hit by the swathe of planned redundancies is the tech sector, which has had to cut around 2,200 jobs this year.
Caroline Baker, a partner at GQ|Littler, said employers “can no longer avoid making job cuts” due to economic headwinds.
“Until recently, skills shortages across many sectors meant that the main issue facing employers was finding personnel to fill roles.”
However, as the UK faces a prolonged downturn, many businesses are not only putting recruitment on hold but also making cuts in order to shore up their bottom line.”
Technology’s spike in planned redundancies she said should be understood in the context of being a “sector that has traditionally seen high turnover of staff.”
“Rapid growth meant that those who were made redundant were snapped up by other companies quickly, usually after receiving a generous payoff.”
But in the current economic climate “tech businesses are unlikely to be in a position to offer these large severance packages. Instead businesses are likely to allocate shrinking budgets to increasing salaries of remaining staff, to help in the cost of living crisis.”