Sunday, 31 January 2010

AstraZeneca, Shop Direct and Toyota all cut more jobs as experts warn that unemployment could rise for many more years


AstraZeneca's premises in Macclesfield, Cheshire

AstraZeneca's premises in Macclesfield, Cheshire. The company has announced another 8,000 job cuts but it is not known how many of those will be in the UK. Photograph: Peter Byrne/PA

Thousands of jobs losses were announced by UK companies today, underscoring fears that British households will continue to suffer the repercussions of the recession for years to come.

Global pharmaceutical company AstraZeneca unveiled plans to cut another 8,000 jobs on top of the 15,000 already announced, but would not say how many will go in the UK. At the same time, the home retail group Shop Direct outlined plans to cut 1,500 jobs in Sunderland, Burnley and Newtown in mid-Wales and carmaker Toyota aims to axe up to 750 jobs at its main UK factory.

AstraZeneca made the announcement as it missed analysts' forecasts for fourth-quarter profits. It predicted a blow to revenues as it loses market exclusivity on key drugs.

Since it started an overhaul in 2007, the Anglo-Swedish drugmaker has cut 12,600 jobs from a 15,000 target.

"Today's announcement represents an increase of 8,000 on previously announced plans, and the programme timetable has been extended to 2014," it said in a statement.

"Keeping our employees informed remains our priority and we will consult fully with them on any proposed changes, acting in accordance with relevant consultation requirements and local labour laws. Therefore we cannot confirm the location of these proposed changes at this time. The changes will be made across global functions and will include roles in sales & marketing, business infrastructure, R&D and supply chain."

At Shop Direct (formerly Little woods and part of the billionaire Barclay brothers' business empire) the bulk of jobs under threat are in Sunderland, according to the GMB union.

"GMB members employed by the company are devastated by this news from Shop Direct," said Mick Hopper, a GMB Northern Region officer.

"GMB have been in negotiations with the employer over a long period to arrive at work practices and terms and conditions of employment to ensure the success of this employer.

"This announcement is a body blow in an area of very high unemployment. GMB will do everything we can to lessen the impact of this disastrous announcement during the 90 day consultation period.

"We will be seeking help from elected representatives and other government agencies to see what can be done to save jobs."

Shop Direct, which employs 9,000 people, said that it was being forced to close call centres in Sunderland, Burnley and Newtown because of changing shopper habits.

"With more customers shopping online than ever before and peaking at 85% during the recent Christmas period, Shop Direct Group is now faced with excess capacity and more space in its contact centres than it needs to handle the declining call volumes," it said in a statement.

Toyota said today that workers at its Burnaston plant near Derby were told earlier this week it would not have enough work for about 750 employees from August.

The news of thousands of job losses follows a stark warning from a group of labour market experts earlier this month that unemployment may continue to rise for years after the recession ends.

The coalition, which includes the TUC trade union group, has warned of a repeat of the 1990s, when it took six years from the end of the recession for long-term unemployment to return to pre-recession levels.

It also echoes cautious outlooks from retailers, restaurants and other leisure-sector companies over the limited potential for consumer sentiment to pick up.

Nightclubs chain Luminar recently said youth unemployment, in particular, was denting business, while Punch Taverns said drinking in pubs was being hit by job losses.