Are 2800 Job Cuts In UK Retail Sector – A Sign Of Financial Crisis?
In the last week £2.87 trillion disappeared from global equity markets, the largest stock market crash seen since 2008.
Fortunately, most markets have rebound and investors belive the worst is over.
Despite calm returning, it is to remind people of the last financial crash and led some to believe. Briefly that another crisis was imminent.
It is the not only worrying comparative to the last financial crash which was a decade ago. Right from the start of the year thousands of jobs in the UK retail have been cut entirely or revealed to be at risk.
On January 1, the Big 4 have announced major restructures that will result in staff facing pay cuts in redundancy.
28 head office roles cut by Asda, thousands to be cut by Sainsbury in a restructure, Tesco to cut 800 and repositioning 900 more, At Morrisons a similar restructure can be seen with 700 face a pay cut or redundancy.
Marks & Spencer – often regarded as a bellwether of UK retail announced plans to close 14 stores in its latest turnaround plan, plunging 468 jobs into uncertainty.
Earlier this week Warren Evans fell into administration jeopardising 285 jobs. It has followed with East’s administration last month which has already seen 30 head office redundancies with a possible 286 more.
B&Q slashed a further 200 jobs, while Topshop/Topman announced store manager changes which could result in around 150 redundancies.
Debenhams announced to cut 320 jobs across its estate in a bid to cut costs.
Toys R Us UK revealed a buyer is still being sought for the business if not found then 2400 staff will be at risk.
An overall 2800 jobs have been cut, while 4753 are at risk in the first five and half weeks of 2018.
It doesn’t include the 27,000 redundancies happened. I the wake of the collapse of Woolworths in last week of 2008 and first week of 2009, jobs lost in the retail sector were 4065 in 2009 by his time.
The figures may not be alarming but they are far too close for comfort. It is hard to determine how we should take these figures. Are they blatant warning signs staring us, just like last financial crisis, we refuse to pay attention to? Or they are the birth pangs of a global economy undergoing significant change?
Analysts are divided, the Guardian’s economic editor Larry Elliott thinks the recent scare is a “correction not a crash”. The last year investors had started displaying signs of “reckless overconfidence” akin to lead-up of the last collapse, but he argues this could serve as a much needed reality check.
James stack one of the few men who predicted the housing collapse of 2008 wrote that the housing bubble is once again ringing alarm bells.
“It is 2005 all over again in terms of the valuation extreme, the psychological excess and the denial,” he said.
As many of the retailers are already on the brink of financial turmoil, a major economic downturn could turn those 2800 job cuts into next Woolworths or BHS.