Thousands of civil servants and town hall workers will share the pain as government efficiency savings bite, while struggling retailers and manufacturing industry are heading for heavy redundancies.
The ranks of the unemployed will be swollen by up to 27,000 staff from Woolworths, which closes its last stores on 5 January, and 1,400 employees of the furniture retailer MFI, which shut last week. The Cabinet expects job losses to accelerate in the harsh trading conditions of 2009. One cabinet member told The Independent: "We know there will be a bloodbath of job cuts in January and February. A lot of companies are holding back until after Christmas."
Contradicting saloon-bar wisdom, which says public jobs are safe, the public sector will not be immune from waves of redundancies, with unions warning of more than 5,000 planned job losses among town hall workers alone. They could be the tip of the iceberg as councils face tough financial settlements from central government.
Elsewhere in the public sector up to 2,000 mainly white-collar posts will go at Transport for
Seventy hospital staff in
The number of people out of work stood at 1.86 million last month and may have already passed two million.
The Federation of Small Businesses forecasts that 30,000 small firms could fold in 2009, with the loss of 160,000 jobs. Its spokesman, Stephen Alambritis, said: "It will be a very, very difficult year â€“ there’s a foreboding about February and March in particular."
Although transport is considered a strong sector in a recession, that has not stopped National Express announcing plans to shed 300 posts. EWS, the Doncaster-based rail freight company, is in consultation with rail union TSSA about axing 530 jobs.
Insolvency experts believe another 10 to 15 well-known retail chains could follow Woolworths into the history books as shoppers rein in spending.
Speculation is rife that the music retailer Zavvi, fashion group The Officers Club and the sportswear outlet JJB are heading for a financial crunch.
Brian Strutton, the national secretary of the GMB, reported that branches up and down the country were reporting councils planning to cut jobs in 2009: "Reasons given go from the tightening of government grants to the credit crunch, to the Icelandic banks effect."
Mark Serwotka, general secretary of the PCS union, which represents civil servants, said: "Budget cuts, planned when the economy was in better shape, will not only result in the Government adding to the growing unemployed, but also undermine service delivery at a time of most need."
Already 63,000 jobs have gone in the City of
Abbey, which is now owned by
Stephen Overell, the associate director of the Work Foundation think-tank, said temporary workers and new staff had so far borne the brunt of job cuts. But he warned: "It is going to get much worse before there is any hope of recovery."