Coronavirus crisis prompts more than a quarter of UK businesses to cut staff

More than a quarter of UK firms said they are reducing staff levels in the short term, according to figures from the Office of National Statistics (ONS).

The news comes as the coronavirus pandemic continues to have a severe impact on the UK and global economy.

Of the 3,642 businesses who responded to the Business Impact of Coronavirus Survey (BICS) by ONS, 45 per cent reported turnover that was "lower than expected" for the period March 9 to 22 this year.

A total of 27 per cent said they were reducing staff levels.

Just five per cent of businesses reported recruiting staff in the short term.

On March 23, Prime Minister Boris Johnson announced drastic measures to tackle the spread of Covid-19 including closing pubs, clubs, cafes and restaurants.

In an attempt to encourage businesses from letting staff go, the government announced a coronavirus job retention scheme whereby employers can contact HMRC for a grant to cover wages for employees who are furloughed.

Chancellor Rishi Sunak explained the Government will pay 80 per cent - up to 2,500 a month - of the wages for workers who are temporarily laid off but remain on the companies' books.

He said the measures represented "an unprecedented economic intervention to support the jobs and incomes of British people".

A similar package of grants was later announced for self-employed workers.

Earlier on Thursday, figures from the British Chambers of Commerce, which were taken between March 25 and March 27, revealed 44 per cent of firms planned to furlough at least half of their workforce.

Almost half (46 per cent) of staff who responded to the ONS survey said they had encouraged staff to work from home while nearly 30 per cent said they had decreased working hours to manage their workforce.

The majority of businesses also reported that the prices they buy and sell at were stable, with 68 per cent saying there was no change to their selling prices from March 9 to March 22.

Among companies that import and export goods, nearly 60 per cent said their trade had been affected by the crisis.

ONS data from the study was gathered from rapid response surveys, novel data sources and experimental methods.

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