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London becomes redundancy capital of Britain

Construction work on the decline in London
Construction work on the decline in London - SURFLEADER/ISTOCKPHOTO

A downturn in tech and construction has made London the redundancy capital of Britain, new data shows.

One in six companies is planning to cut staff as the jobs market in the capital is disproportionately hit by slumps in retail, housebuilding and IT, according to the Recruitment and Employment Confederation (REC).

Employer sentiment towards hiring in London was at the lowest level of any region in Britain.

The share of employers planning to make new hires in the capital over the medium term outnumbered those who did not by a margin of only 18, nearly half the margin of 27 recorded over the summer.

This was in stark contrast to the national average rating, which rose from 20 in August to 23 this autumn.

The London rating was nearly half the margin of 30 in the North of England.

Across the capital, 16pc of businesses said they planned to reduce their headcount.

Neil Carberry, the REC chief executive, said this is because the sectors that are struggling most, such as IT and retail, are concentrated heavily in London.

“Construction, IT, retail, and the secretarial and clerical sectors are all underwater in terms of vacancies at the moment,” he said.

Clerical jobs are the first place companies look to make savings when they are trying to offset the blow of general cost inflation, he added.

“And obviously they are looking at what they can automate.”

At the same time, the IT sector is letting staff go after companies over-hired during the pandemic, Mr Carberry said.

The construction sector is grappling with a massive downturn in housebuilding as high mortgage rates hammer buyer demand.

By contrast, sectors that still have strong job outlooks, such as healthcare and education, are spread evenly across the country, Mr Carberry said. Britain’s stem engineering industry, which also has a strong outlook, is also primarily based outside the capital.

Overall demand continued to fall with the total number of job vacancies declining for the 17th rolling quarterly fall between August and October.

There were 957,000 vacancies, down 21.2pc year-on-year, meaning there were 257,000 fewer available roles compared to the same period in 2022. However, this was still 156,000 higher than at the start of 2020, before the pandemic labour shortage began.

The UK workforce between July and September this year totalled 32.98m, up by 27,000 compared to in May.