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Fears of deeper slump as thousands more jobs are cut across Britain
Simon English and Nick Goodway04.12.08
A dramatic day of job losses across all sectors of the economy today increased fears the recession could be one of the deepest in memory.
Thousands more City workers face redundancy before Christmas and Woolworths seemed to be on the brink of a total collapse, perhaps with a loss of 30,000 positions.
In one of the worst days for job losses for years, at least 7,000 people were told to seek alternative work.
Retailers, government workers, IT specialists and financiers have all been affected.
Investment banks Nomura, Dresdner Kleinwort and Credit Suisse were the first to bring out the axe this morning. Nomura, the Japanese bank which bought most of the London operations of failed bank Lehman Brothers is set to cut 1,000 people in the capital.
Credit Suisse is firing 5,300 worldwide, of which 650 will go in London. And Commerzbank, the parent of Dresder Kleinwort, is looking for 1,200 cuts in the UK.
But the cuts are not confined to the City. Fears the public sector will be hit hard were confirmed when HM Revenue & Customs said it will shut more than 90 offices across the UK and get rid of 3,400 jobs. Unions warned this will undermine the department's ability to collect taxes and provide advice. City recruitment firm Michael Page issued a profits warning and offered a glum prediction for the future, along with 350 job cuts.
It said the loss of confidence in the wider economy was "now more marked and has spread rapidly in November to virtually every industry sector and geographic market in which the group operates".
Unemployment in the UK now stands at 1.8 million, the highest since 1997. Economists predict it will reach 2 million by the end of the year and 3 million before the economy starts to recover.
Most damagingly, Woolworths now seems likely to disappear from the high street altogether at a probable cost of 30,000 jobs after Dragons' Den entrepreneur Theo Paphitis failed to agree a rescue deal.
Paphitis was looking at buying some of Woolies' more profitable stores to rescue at least some of the company from administration. Today he said a deal could not be negotiated. He is understood to be shattered that he could not convince administrators from Deloitte's to go with his plan.
"It is with disappointment that I confirm we could not reach a deal," he said. "My vision was that we could retain the Woolworths brand name through purchasing a large share of the existing retail business. This would have involved providing a secure future for as many employees as possible."
Instead it seems the company will be broken up and the profitable stores sold to supermarket groups including Tesco, Sainsbury and Morrison. Woolies is ready to unleash savage price cuts to get in as much cash as possible. A sale will begin tomorrow with many items going at a 50 per cent discount.
Hotel group Folio also called in the administrators today. The Swindon-based company has 36 hotels and turnover of about £70 million a year. It is trying to find a buyer to keep the business afloat and protect 2,000 jobs.
Furniture and accessories chain The Pier also slumped into administration.
Experian, the Nottingham based business information group, is entering what it called a "90 day consultation period" with its 4,000 staff. About 300 jobs losses are expected.
Reader views (2)
The collapse of retail will be married to the cratering commercial Real Estate market, and a total nightmare in the credit card trade.
I suggest learning how to grow carrots, mate, because the age of quick and easy credit and fraudus rampantus in the world banking system, many of us will be left on the side of the highway.
What perplexes me,is how citizens of Counties around the world haven't woken up to the fact that their Governments are giving THEIR tax dollars to their old school chums that run banks.
Bailouts, indeed.
The U.K. has had slumps before - but this one will make the Thirties look like a stroll on The Mall.
I pity so many people that thought their flat would be worth enough, to sell and retire to Alicante, that will, instead, soon be lining up for the Dole and some bread.
- Thomas, Vancouver, Canada
Woolworths was once the Department store on nearly every High Street with some covering several floors. Oxford Street had 2 stores.
There are many small shopping centres where it remains the main store and if a suitable alternative is not found (i.e no food only supermarket) the rest of the small shops could close as shoppers move to places with more choice.
Its ironic that the closure of a large shop could put thousands of small shops at risk.
- Melvyn Windebank, Canvey Island, Essex
