More than half of British businesses are planning on slashing jobs in an effort to reduce costs as a result of the credit squeeze, new research has shown.
The number of UK-based companies who are planning on making job cuts in response to increasingly difficult market conditions has almost doubled over the last three months, according to KPMG’s quarterly national business confidence survey.
The mood among business leaders has understandably deteriorated over the past quarter, with 75% of respondents confirming that their organisation has now been negatively impacted by the credit crunch. Only 40% of people surveyed now feel optimistic about their company’s prospects, compared to 60% who were feeling bullish in March.
Furthermore, organisations seem resigned to the fact they could remain in the doldrums for some time, with 56% expecting the current economic conditions to have a negative impact on UK business for one to two years, with a further 16% thinking that it will be between two and five years before we see an upturn in fortunes.
Government intervention so far has been met with relative indifference with 35% of respondents saying that no-one has benefited from previous interest rate cuts. As a result, the majority (52%) want the Bank of England to hold the rate at its current level.
Malcolm Edge, regional chairman for KPMG in the North urged to be ‘nimble’ and act now to protect their businesses. “Those businesses that have taken steps already to reduce costs and improve cash flow are to be applauded as these may have averted trouble further down the line.”
Edge also said that now is a great time to tap into new market opportunities. “With the eurozone already buying approximately 60% of UK exports, and with the increasing purchasing power of new and emerging markets such as India and China, there are certainly opportunities out there to be grabbed by those who are fleet of foot.”
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