The latest figures from the Business Distress Index, compiled by the insolvency regulatory body, R3, shows that one in ten businesses made staff cuts in 2012. The figures showed that cutting the staff head-count was the single ‘distress indicator’ where large companies led the way over small and medium-sized companies, with 17% of large companies making staff redundant compared to 12% of small businesses.
For all other indicators, small companies showed 'significantly higher levels of distress.’ According to the distress index, 37% of small
businesses showed decreased profits compared with 7% of large companies. Worryingly, small and medium sized companies accounted for
the entire 33% of companies that were experiencing one of the major 'zombie company' red flags: regularly using their maximum overdraft limit.
Redundancy looks set to be a threat for workers of large enterprises as we enter 2013, as staff cuts will continue to be used a way of restructuring quickly following decreased sales volume or the loss of large contracts. Workers being made redundant after February 2013 will be eligible
for the increased redundancy payment amounts, with the limit on the weekly amount payable rising from £430 to £450, and the limit on the statutory guarantee payment payable to employees laid off work increasing to £24.20 a day.