Bosses at businesses of all sizes have been left with little or no choice but to cut staff, due to the increase in National Insurance contributions and rise to the minimum wage announced in October’s Budget.

A quarter of UK employers plan to make redundancies before Budget tax increases this April (Image: Jordan Pettitt/PA Wire) Higher business rates are also set to add to company costs, and 25pc of employers now plan to make redundancies before the changes comes into effect in April, according to the latest poll by the Chartered Institute of Personnel and Development.

This is the highest level since 2014, outside of the pandemic.

Some of East Anglia’s biggest employers have already announced hundreds of job losses.

Lotus announced 200 redundancies in November, cutting jobs for the third time in just 18 months.

Lotus up to 200 redundancies last November (Image: Denise Bradley) The Norwich-based car manufacturer has invested more than £500m in technology and infrastructure at its Hethel factory to go all-electric by 2028, two years before the government’s ban on sales of petrol and diesel cars.

READ MORE: How changes to workers’ rights will affect businesses

Jarrolds has also axed jobs as a direct result of the Budget, with the Norwich department store making a small number of roles redundant due to rising employment costs.

Others, like the Norwich chocolate company Gnaw, are now investing in automation rather than adding to their existing headcount.

Gnaw Chocolate has invested in automation at its factory at Norwich’s Whiffler Road industrial estate to keep staff costs down (Image: Supplied) And it is not just large employers feeling the impact of surging staff costs.

The Federation of Small Businesses’ (FSB) latest survey found 40pc of small businesses in the East see higher labour costs as a barrier to growth in the next 12 months.

Small business confidence also hit its lowest point on record outside the pandemic in the final quarter of last year, despite Labour’s claims to be “pro-business” and “the party of wealth creation”.

Paul Simon of Suffolk Chamber of Commerce said business confidence has taken “a punch to the guts”.

Paul Simon of Suffolk Chamber of Commerce (Image: Lucy Taylor) “Businesses are winded by the surprise tax hikes announced in October and wary as to what might be about to hit them next,” he said.

“Firms are now actively winding down their earlier recruitment plans ahead of the new financial year.

“Anecdotally, a number have confided in us that they are having to let some staff go in order to balance the books.”

JOB CUTS 

Jarrolds announced earlier this month that it was making four roles redundant due to rising employment costs.

Jarrolds department store in Norwich (Image: Jarrolds) The last time Jarrolds made significant redundancies was in 2020, during the pandemic, when 90 members of staff lost their jobs – just under a quarter of the store’s 400-strong workforce at the time. 

This included the group’s former chief executive Minnie Moll.

Nick Steven-Jones, the current chief executive officer of the Jarrold Group and chairman of the Norfolk Business Board, said: “We, like all businesses, are experiencing rising costs, including the cost of employing people as a direct result of the October Budget.

Nick Steven-Jones, chief executive officer of the Jarrold Group and chairman of the Norfolk Business Board (Image: Supplied) “While we are always saddened to lose any of our valued colleagues, the need to keep investing and striving for growth combined with managing increased costs means we are forced to take extremely tough decisions to identify where we can make savings in order to secure the long-term future of Jarrolds.”

EMPLOYMENT FREEZE

Sara Docwra currently employs nine people at signage and graphics company This is Effective in Great Yarmouth.

She said that although the increased rate of National Insurance will not have as much of an impact on small businesses, the knock-on effect of rising employment costs for big firms could lead to less work coming their way.

Sara Docwra, co-owner of signage and graphics company This is Effective in Great Yarmouth (Image: Supplied) “We work with a lot of large businesses and the impact could be that they make do with unkempt signage, peeling vehicle graphics and washed-out workwear to save money, which will undoubtedly have a detrimental impact on our turnover,” Mrs Docwra, co-owner of This is Effective, said.

“We have decided to put a freeze on skilled recruitment until things settle down. It has made us look at alternative options such as upskilling and diversifying current staff, as well as looking to employ college leavers on apprenticeships.  

“It is important that we remain positive in these times and look at other options.”

Signage and graphics company This is Effective currently employs nine people at its Great Yarmouth base (Image: Supplied) AUTOMATION – THE FUTURE?

Gnaw Chocolate employs 30 people at its Norwich factory and has recently been investing in automation to avoid the added cost of taking on more staff. 

The artisan chocolate company said the cost of cocoa skyrocketing by 300pc in the last 12 months, and ever-rising employment costs, have stalled its expansion plans. 

Gnaw’s chocolate (Image: Supplied) “We have taken the decision to invest to build more automation into our core manufacturing processes, thereby reducing the need to expand our production headcount as we grow,” said Mike Navarro, Gnaw’s managing director. 

“This is a short-term cost to the business and one we would rather not have to take, but with this investment we will not need to employ more production colleagues or take on agency staff as our volumes grow.

READ MORE: Norfolk chocolate company investing in automation to keep staff costs down

“We were expecting to bring more production staff to the team as we gear up for the next phase of growth, but that has stalled since the Budget announcement.

“We are holding our existing team and investing in automation to facilitate further growth.”