How to approach job cuts in your business

Strict rules govern the redundancy process. Prepare very carefully if you're intending to cut jobs in your business.

London sightseeing bus © Getty Images
The tourism sector faces protracted turmoil © Getty
(Image credit: London sightseeing bus © Getty Images)

The government’s decision to extend the furloughing scheme by four months reflects the severe and enduring economic fallout from the Covid-19 crisis. But there was also a practical element to last week’s announcement. Without an extension to furloughing, under which the government picks up the tab for 80% of the wages of workers temporarily laid off because of Covid-19, many employers would have had to launch redundancy programmes.

That is because any employer wanting to make more than 100 job cuts has a legal duty to run a 45-day consultation period as part of the process. Employers worrying that there would be no way to keep furloughed workers on once the scheme ended in June, as previously scheduled, would have had to begin consulting on 18 May.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.