Although 19 mainly retail businesses will pledge to create as many as 40,000 new jobs over the year ahead at a Downing Street jobs summit today, the financial services sector is expected to axe 15,000 posts this quarter.
Ahead of the publication of a joint report with management consultancy PricewaterhouseCoopers, head of economic analysis at employers’ lobby group the CBI Lai Wah Co revealed that banks, building societies and life insurance companies would be particularly badly hit by the latest jobs cull as they seek to control costs.
The job losses come on top of a cut in 30,000 positions made in the three months to December, the fastest pace in 17 years as 49% of firms reduced staff numbers. The predicted 15,000 job losses this quarter would take the overall headcount in financial services to about 970,000, the lowest since records began. Employment in the sector normally stays above the one million mark and peaked at 1.1 million in autumn 2008, before dipping to just below one million at the start of last year.
Such figures would not appear to bode well for coalition government hopes that private sector firms will create enough jobs to offset the loss of 330,000 public sector posts as a result of budget cuts over the next four years.
In a bid to show that the government is as focused on encouraging economic growth as it is on cutting public spending, however, the Prime Minister will meet the bosses of some of the UK’s biggest firms today to discuss their plans for job creation and what it can do support such activity. David Cameron said he was working on the “most pro-business, pro-growth, pro-jobs agenda ever unleashed by a government”.
Among the attendees at Westminster will be supermarket chain Morrisons, which has pledged to create 5,700 new jobs by opening new stores and 300 in manufacturing. Tesco has promised 9,000 new posts, Sainsburys 6,500 and Asda has said it will create 15,000 new retail apprenticeship positions. John Lewis and Microsoft each guaranteed 4,000 new posts and gas company Centrica 2,600.
Shortly before the meeting, however, Labour leader Ed Miliband will host a press conference accusing the Prime Minister of undermining many jobless youngsters’ chances of finding work by axing the £1 billion Future Jobs Fund initiative a year early.
An influential Commons committee warned last month that the decision would result in unemployed young people facing a potential gap in the support available to find employment. Youth unemployment in the UK currently stands at about 20%.
Update: Sainsbury’s has pledged to create 20,000 new jobs with Tesco offering 9,000. Morrisons meanwhile has promised to make 6,000 new positions.