Author Profile Picture

Cath Everett

Sift Media

Freelance journalist and former editor of HRZone

Read more about Cath Everett

1000s of private sector jobs ‘at risk’ across all industries

career

As the Ministry of Defence revealed plans for a second round of redundancies in the armed forces, thousands of jobs also appeared to be at risk across the private sector.

The government department announced that 2,900 personnel were to go in the Army, along with up to 1,000 RAF jobs and up to 300 positions in the Royal Navy as it attempts to deal with the “black hole” in its budget.
 
Some of the job losses have already been accounted for in previously announced cuts, but they are expected to include higher numbers of compulsory redundancies than the last round as many who wanted to leave the forces did so last time. Of the 3,000 who lost their jobs last September, three out of five went voluntarily.
 
Under the terms of the Strategic Defence and Security Review, which was unveiled in 2010, the Navy and RAF have to axe 5,000 posts each by 2015, although following this latest round of redundancies, headcount reductions are anticipated to come from natural wastage and a recruitment freeze.
 
The Army, on the other hand, must reduce its total fighting force from 100,000 now to 82,000 by 2020. According to the Daily Telegraph, the service is getting rid of staff by not renewing the contracts of personnel who have signed up for 12 years, while also freezing recruitment and cutting the number of new soldiers entering the profession from 7,000 to 5,000.
 
At the MoD itself, meanwhile, unions have expressed concern over the department’s apparent break-up. The newspaper indicated that four private sector contracts are due to be awarded over the next few weeks, which include the creation of Defence Business Services, an organisation that is meant to deal with the department’s entire HR and finance operations.
 
DBS will, among other things, be tasked with handling the army’s recruitment programme for much less than the £1 billion per annum currently being spent on such activity. The front runner to be preferred bidder at the moment is Serco, which is also up against Capita.
 
1000s of private sector jobs to go
 
The move is part of an ambitious programme to cut the MoD’s total headcount by 25,000 in order to generate savings of more than £10 billion over the next four years. But other question marks also hang over the future size, shape and responsibilities of the Abbey Wood centre, which has been set up near Bristol with a staff of 20,000 to centralise purchasing.
 
Another new organisation, Defence Equipment and Support, will likewise be required to produce purchasing and efficiency savings, while the winner of a fourth contract to run the Defence Infrastructure Organisation is expected to save £1.2 billion from selling surplus MoD buildings and land, while also managing its remaining estate.
 
In the private sector, on the other hand, the Royal Bank of Scotland wasbranded as “deplorable” for withdrawing from last ditch talks to save fashion retailer, Peacocks and its sister chain Bonmarche, putting 13,000 jobs at risk in the process.
 
The move by the tax-payer-controlled bank forced the retailer, which operates more than 700 stores in both the UK and abroad, to go into administration on Thursday after last-ditch rescue talks collapsed. Restructuring experts KPMG are now trying to find a buyer.
 
The news came only days after RBS revealed that it was to cut 3,500 jobs itself, however, following a shake-up of its investment banking arm, which is intended to be halved in size. The losses, which will be split between the organisation’s UK and international offices, come on top of 2,000 previously announced job losses at the unit.
 
A further 950 posts are set to go at its Irish subsidiary, Ulster Bank, with 350 being eradicated in Northern Ireland and 600 in the Irish Republic. The bank has already cut staff numbers by about 30,000 over the last two years, 22,000 of which were based in the UK.
 
Elsewhere, Premier Foods, which owns the Paxo and Mr Kipling brands, likewise announced plans to sell off non-core businesses and axe about 600 posts in an attempt to double its cost savings to about £40 million per year. The redundancies will amount to about 5% of the firm’s current workforce of 12,000 as it continues to negotiate with banks over the re-financing of its debts.
 
 
Author Profile Picture
Cath Everett

Freelance journalist and former editor of HRZone

Read more from Cath Everett
Newsletter

Get the latest from HRZone

Subscribe to expert insights on how to create a better workplace for both your business and its people.

 

Thank you.

Processing...
Thank you! Your subscription has been confirmed. You'll hear from us soon.
ErrorHere