Jobs bloodbath: Four more major employers cut staff

The owner of British Gas has become the latest major company to axe thousands of jobs in the wake of the Covid-19 crisis.

Centrica yesterday said it would slash 5,000 roles to speed up cost-cutting plans, a blow that came as chemicals firm Johnson Matthey announced plans to shed another 2,500 staff and Bombardier Aerospace said 600 jobs would go in Northern Ireland.

Heathrow airport also said it would reduce its headcount after passenger numbers plummeted.

In recent weeks, Rolls-Royce, British Airways, Easyjet, Virgin Atlantic and BP had all announced cuts, with the jobs meltdown wiping out tens of thousands of roles so far.

The latest turmoil comes after official figures showed just under 9m workers have now been ‘furloughed’ by their employers under the Government’s Job Retention Scheme.

Economists – including officials at the Bank of England – say the bailout announced by Chancellor Rishi Sunak, which has cost almost £20billion so far, will save many jobs.

However, critics fear the scheme is being used by some businesses as a ‘waiting room’ for redundancy and that many more workers could soon be axed.

A string of firms – among them British Airways, Virgin Atlantic, Rolls-Royce and now Centrica – have furloughed thousands of staff, only to announce mass redundancies just weeks later.

Business leaders have warned the situation will get worse if the Government persists with the 2 metre social distancing rule. 

Many firms, including pubs and restaurants, say it is impossible to operate under these circumstances, with an estimated one million jobs at risk in the hospitality industry alone.

The Organisation for Economic Cooperation and Development (OECD) warned on Wednesday that unemployment could almost triple to 11.7 per cent in the summer – or worse if a second lockdown is required. This would equate to more than 2.5m losing their jobs.

At Centrica, which employs around 27,000 staff, the job cuts follow 4,000 already planned this year, which were announced in 2018. 

The firm – which has furloughed 3,800 workers – said more than half of the roles being cut are in management, as part of plans to wring out £2billion in savings by next year. 

Chief executive Chris O’Shea said: ‘I truly regret that these difficult decisions will have to be made and understand the impact on the colleagues who will leave us. 

However, the changes are designed to arrest our decline, allow us to focus on our customers and create a sustainable company.’

Mark Pettifer, regional officer for union Unite, said: ‘These job losses are another blow to the already fragile British economy and have created worrying uncertainty amongst the entire workforce.’

Johnson Matthey, which makes catalytic convertors used in cars, announced its job cuts as it also revealed it was halving its dividend because of the financial hit from the pandemic.

The redundancies will see about one sixth of its workforce leave in just three years, after Covid-19 gouged £60million out of its profits. The dividend is being cut to 31.1p per share.

Bombardier, which is cutting 2,500 roles globally, said 600 jobs are being shed from its factories near Belfast because of ‘extraordinary industry interruptions and challenges’.

The pandemic has effectively halted most international travel, crippling demand for new aircraft. 

That has also hammered Heathrow, which yesterday revealed passenger numbers had fallen by 97 per cent in May compared to the same time a year ago.

Chief executive John Holland-Kaye said it was ‘no longer sustainable’ to try and protect jobs, particularly after the Government introduced a 14-day quarantine for anyone travelling to the UK.

 Heathrow employs 7,500 staff directly but Kaye has warned up to 25,000 jobs are under threat. This includes lay-offs already announced by British Airways, Virgin Atlantic and other companies.