Firms to cut jobs ahead of rise in employment costs
Published On Feb 17, 2025, 3:37 AM
A survey indicates that UK companies are planning to reduce jobs or hire fewer workers due to upcoming increases in National Insurance contributions and the minimum wage. Over a third of the surveyed firms intend to cut their workforce, while 42% will raise prices to manage the increased employment costs. The sentiment among businesses is at its lowest in a decade, stressing that sectors like retail and hospitality, which employ large numbers, will be particularly hard-hit. Major retailers have already warned of inevitable job losses on the High Street due to these financial pressures.
Stock Forecasts
TSCO
Negative
With rising employment costs leading to job cuts and reduced hiring, consumer spending may decline, particularly in retail and hospitality sectors. This situation could negatively impact companies reliant on consumer spending, potentially leading to lower stock performance.
AMZN
Negative
The anticipated cuts in staffing and increase in prices could result in reduced consumer demand for products, which might hurt profits in the affected sectors.
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