Cold comfort for jobs

In The Bleak Midwinter could have been the title of a business plan.
It is in the months running up to the end of the financial year in March that many businesses have to draw up their budgets for the next financial year.
This is why you tend to get more job losses and business closures in the months immediately after Christmas.
When things are going well, most businesses will budget for increased sales and, if the finance director is in a good mood, possibly even new jobs or the odd pay rise.
When times are tough you concentrate on what is essential to keep the business going. Those things that aren’t deemed essential – ‘non-core activities’ is the phrase marketing types wheel out to avoid admitting that it involves people – are often at risk of the red pen.
This is one of the reasons we’ve been seeing around 100 jobs a week going in and around Nottingham.
In a big city with some big employers, 20 jobs a working day may not sound like much. And painful though it is for every one of the individuals it affects, a rate like this doesn’t spell doom for the economy.
It probably does tell you that the economic downturn that started to gather pace last year is having an effect. May be a few firms are starting to pull in their horns.
Any business that is particularly exposed to financial services – Zeda and Experian, for example – is likely to feel the pain more than most because it is the banks that have been hobbled by the credit crunch.
Bear in mind with Experian, though, that it was warning of the effects of the consumer downturn (which isn’t the same as the credit crunch) more than a year ago. It’s important that we don’t get two separate economic events tangled up – as plenty of shops in Nottingham will tell you, interest rate rises meant the consumer spending downturn was underway well before the banks overdid it.
This affected Experian first because of all the credit-checking and consumer analysis work it does. When shoppers borrow less, there are fewer checks.
But neither Experian nor any other business will be keen to dwell on bad news. This isn’t because they like to look the other way, but because businesses have to find ways around problems if they are to survive in the long-term.
Unfortunately, that sometimes means business plans that include redundancies in mid winter. Bleak indeed.