UK service sector job cuts continue


A U.K. clean energy company is seeking to create 1,000 jobs by the end of next year, expanding its technology to simplify the way consumers buy electricity.

Octopus Energy Ltd. said it wants to make the U.K. the “Silicon Valley of energy” and detailed a plan to expand its cloud-computing platform, known as Kraken, which aims to make it easier and cheaper for people to use renewable energy.

The new jobs will go mainly to graduates and will help Octopus double its workforce by the end of 2021, according to a statement by the company on Monday. Positions will be spread across its sites in London, Brighton, Warwick, and Leicester. It will also build a technology, data science, and artificial intelligence center in Manchester, in the north of England.

Prime Minister Boris Johnson, who is seeking to boost green jobs as a way to help the U.K. economy recover from the coronavirus pandemic, welcomed the company’s announcement.

Last week four-year-old Octopus Energy bought U.S. startup Evolve Energy as part of a $100 million push into the American market. Chief Executive Officer Greg Jackson said Octopus’s Kraken technology had the same potential as Apple’s App Store when it was first launched.“It’s U.K. tech companies like Octopus who will ensure we continue to build back greener and remain a world leader in pioneering renewable energy, leading the path to net-zero whilst creating thousands of skilled jobs,” Johnson said.

“Through Kraken, our cloud-based energy platform, we’re revolutionizing the energy industry in the same way, creating jobs not just through increased demand for affordable renewables, but by facilitating the development of new and emerging industries like electric vehicles, electric heating, and vertical farming,” Jackson said.

Most businesses will resume using their offices after the coronavirus crisis, despite a shift towards home working, according to a survey of company directors. 

The research found that 74 percent of directors said they would keep increased home working arrangements, and half said they would reduce their long-term use of the office following the pandemic.

Meanwhile, 30 percent said their use of the office would be unchanged.

The IoD said “the benefits of the office haven’t gone away”, and warned that the prospect of increased long-term home-working could raise legal questions over employers’ responsibilities for staff outside the office. 

It also urged the government to introduce measures, such as tax incentives to harness digital technology and funds to improve management skills, to help the economy transition to more remote-working. 

IoD Director of policy Roger Barker said: “Working from doesn’t work for everyone, and directors must be alive to the downsides. Managing teams remotely can prove far from straightforward, and directors must make sure they are going out of their way to support employees’ mental wellbeing.”

He added: “The benefits of the office haven’t gone away. For many companies, bringing teams together in person proves more productive and enjoyable.

“Shared workspace often provides employees the opportunity for informal development and networking that is so crucial, particularly early on in a career.”

Separate research published last month showed that two-thirds of UK companies believe the motivation and enthusiasm of employees have suffered as a result of remote working during the Covid-19 crisis.

A survey of more than 1,500 firms occupying offices found office working outranked home working for creativity and innovation, as well as productivity and motivation.

Roughly 64 per cent of respondents said employee morale had suffered due to remote working, compared to just 23 per cent who said workers were more productive or had higher motivation at home.

However, the majority of firms stated that a hybrid model was the best option for their staff.

Just under 70 per cent of companies said they were planning to reduce workspace costs by allowing employees to work more flexibly, the survey, carried out by FTI Consulting on behalf of law firm CMS found.

Britain’s services companies continued to cut jobs last month, despite growth holding up better than feared.

The latest survey of purchasing managers across UK services firms shows that layoffs continued last month -- a trend that is worsening with Cineworld’s closures.

Data firm Markit explains:

The near-term outlook remains unusually uncertain and firms continued to take an extremely cautious approach to cost management and hiring...

Latest data indicated that employee numbers in the UK service sector continued to fall. Whilst easing to the slowest since March, the rate of job losses was again marked amid evidence of ongoing spare capacity despite some tentative evidence of emerging capacity pressures: backlogs of work increased modestly during September, and for the first time in two years.

Despite this, Markit’s latest UK service sector PMI has come in at 56.1 for September, better than the ‘flash’ reading of 55.1 recorded during the month.

That shows solid growth, although still down on the five-year high of 58.8 seen in August. It’s notably better than the eurozone, where service sector activity fell (see earlier post).

UK service sector PMI
 Photograph: IHS Markit

Firms reported that business continued to pick-up in September. But, growth slowed amid the move back to home-working and the 10pm closure for pubs and restaurants.

Markit explains:

Supporting activity was a further increase in levels of incoming new work, also the third in successive months. With the withdrawal of the UK government’s Eat Out to Help Out scheme, plus an introduction of some tighter restrictions on activity in September, growth in new business was softer than in August.

A lack of international tourism was also reported to have weighed on foreign business, which overall continued to fall sharply.

 The latest Services PMI report, which measures activity in the sector, has slumped into contraction in September.

Service sector firms in France, Italy, and Spain all reported that conditions worsened last month, pulling the overall eurozone services PMI down to 48.0 (showing a fall in activity) from 50.5 in August.

Chris Williamson, a chief business economist at IHS Markit says Europe’s recovery is floundering:

“With the eurozone economy having almost stalled in September, the chances of a renewed downturn in the fourth quarter have clearly risen.

Spain has been especially hard-hit as rising Covid19 case numbers led to further disruptions to daily life. With the exception of the March-to-May period at the height of the first wave of infections, Spain’s service sector contraction in September was the largest recorded since November 2012.

However, renewed service sector downturns were also recorded in France and Ireland, while a nearstalling was recorded in Germany, underscoring the broad-based geographical spread of the worsening service sector picture. Virus containment measures remained particularly strict in both Spain and Italy during September, and were also tightened in France and Germany