Downsizing, redundancies and cutting pay – the ‘catastrophic’ impact of coronavirus on West Midlands businesses

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Downsizing, redundancies and cutting pay – West Midlands businesses have painted a bleak outlook as they dust themselves off and prepare for life after lockdown.

In our inaugural BusinessLive Great Big Business Survey, almost two fifths (39 per cent) said the virus had had a “catastrophic” impact on their business while more than 15 per cent said they expected to make redundancies and a similar amount reported plans to downsize their premises.

But by contrast, 14.4 per cent said the lockdown had made little difference with 16.9 per cent even reporting new opportunities or the prospect of positive outcomes.

The first survey of its kind run by BusinessLive took the pulse of how West Midlands companies were feeling ahead of the Government tentatively lifted its iron fist off the nation’s lockdown.

We received responses from businesses of all shapes and sizes, particular SMEs with turnovers of under £1 million (63.6 per cent) while more than half (57.1 per cent) had been operating for more than a decade.

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Responses also came from a myriad sectors including construction, food service, arts and entertainment, agriculture and retail which accounted for the highest amount.

Among the research’s worrying findings was how businesses were feeling as they looked to the future.

While a third (33.1 per cent) said they were “confident” they could survive the covid-19 outbreak, a similar portion (28 per cent) said they were either “not very confident” or “not confident” at all about their prospects.

A small number of respondents (3.4 per cent) said they were already closing down.

Among the measures being considered by companies to negate the effects of the lockdown and further restrictions going forward, 10.1 per cent said they were considering either reducing bonus payments or removing them altogether.

Others said they were considering pay cuts (7.3 per cent), reducing staff hours (15.2 per cent) and making redundancies (16.9 per cent).

In terms of physical workplaces, 3.5 per cent of respondents said the coronavirus crisis had made them more likely to close high street premises and focus on online sales and services while 15.4 per cent said they would require considerably less space.

By contrast, 18 per of businesses said they actually needed either more or much more space over the next five years.

Focussing on the economics of the pandemic’s impact, almost two fifths (38.7 per cent) said they felt it would take more than a year for their revenues to return to pre-covid levels.

A fifth (19.4 per cent) said it would take six months to a year while 9.7 per cent felt turnover would never return to 100 per cent of pre-covid levels.

BusinessLive editor Alistair Houghton said: “The pandemic and resulting lockdown have had a massive impact on businesses across the West Midlands, and country as a whole, as shown clearly in the results of our Great Big Business Survey.

“Companies have been forced to close or furlough staff while many say they will find it hard to adapt to working from home.

“But across the country, a majority of businesses were confident they would survive this crisis.  Today is #IAmOpen day as many firms across the country will be reopening.

“Small firms are at the heart of our economy and they need support from national and local governments as they get back on their feet.

“They need clear guidance on issues like social distancing, the future of the furlough scheme and support for the self-employed.

“Here at BusinessLive, we’ll keep fighting for Britain’s businesses and we’ll keep telling their stories as they power our economy ahead. If you have a story to tell, let us know.”


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