Job losses become a core part of business strategy

Major companies are planning job losses during 2008 and 2009 as a core part of their strategy to handle the economic downturn…

That is the key headline from KPMG’s quarterly national business confidence survey, which shows that in the “dour” economic climate 53% of businesses intend to reduce headcount, against 29% three months ago. In all, 60% of companies intend to cut costs in response to the credit crunch.

You always have to treat this kind of survey with some caution. However it tells you something important about the prevailing mood amongst the UK’s business leaders. 2008 and 2009 will be about “battening down the hatches” and taking the opportunity to drive efficiencies, reduce capacity and improve productivity.

A quick word about one newspaper headline which has reported this news from KPMG:





It is not true to claim (as the headline does) that “Staff face axe at over half of companies in UK”.

The KPMG survey is a survey of business confidence amongst senior executives at major companies. Remember that there are 4.5 million companies in the UK, of which over 3 million have no staff and the vast majority of the rest have relatively few staff. The headline should really say “Staff face axe at UK’s largest companies” - but I suppose that wouldn’t sound as dramatic!