Expert warns 100,000 jobs could go
Up to 100,000 private sector workers in the region could lose their jobs if the coronavirus crisis lasts into September, an expert has warned.
Professor Mark Hart, of the Enterprise Research Centre at Aston University, estimated a fifth of the 79,000 private sector firms in the Birmingham area could fold without further Government support.
This could mean the loss of 75,000 to 100,000 jobs, while there may be a significant reduction in the number of start-ups, Professor Hart said.
The figures relate to the area covered by the Greater Birmingham and Solihull Local Enterprise Partnership.
This covers Birmingham, Bromsgrove, Cannock Chase, East Staffordshire, Lichfield, Redditch, Solihull, Tamworth and Wyre Forest, an area with a population of 2 million.
But he said firms could survive by refreshing their business model, moving their services online as much as possible and thinking about what they can offer the public in response to the crisis.
He praised the Government’s furlough scheme, in which the state pays 80 per cent of employees’ salaries up to £2,500 a month if their job is put on hold.
But he added this is currently only designed to last from March 1 for three months.
Professor Hart said: “There are a couple of businesses we are talking to who have cash resources to get through to June or July time. They are focusing on keeping the brand alive.
“I see September as the big turning point. This is a colossal threat to business. Nobody could have seen the scale of this a year ago.
“We are encouraging businesses to get through any outstanding invoices, making sure cash flow is a big priority.
“I think the furlough scheme is brilliant. Businesses need to keep on their key staff.
“The Coronavirus Business Interruption Loan Scheme won’t be as successful as intended. Businesses don’t need debt when their future is so uncertain.
“In Birmingham, any slowing in production at Jaguar Land Rover will hit the supply chain of businesses in the region.
“If businesses can’t trade past September, you could be looking at 15,800 businesses folding in the Greater Birmingham and Solihull area.
”You could easily lose 75,000 to 100,000 jobs. The reason why this is happening is revenues are falling, collapsing. Orders are being cancelled. That’s what I am seeing in Birmingham.
“That’s the worst case scenario. What businesses can do is think about how they can refresh their business model and go online.
“The classic example is [fitness coach] Joe Wicks, who has an audience of millions from his front room. He is donating the money to the NHS, but what he is very clever at doing is keeping the brand alive.
“What businesses need to think about is ‘what will they be remembered for during the crisis?’.
“From looking at businesses which folded during the 2007/08 crisis and in the 1990s, it’s not sector specific.”
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