Rachel Reeves faces fresh pressure as one in three employers 'likely to make redundancies by start of 2027'

The conciliation service Acas surveyed 1,000 businesses and discovered that larger companies are particularly inclined to shed staff compared to their smaller counterparts.

Kevin Rowan, Acas director of dispute resolution, said: "The results of our poll reveal that a third of businesses are considering redundancies by the start of next year."

The findings emerge amid warnings that approximately 327,000 workers could face unemployment this year alone.

Mr Rowan urged businesses to exhaust all alternatives before proceeding with layoffs, emphasising that those who do move forward must adhere to strict legal obligations.

"Organisations should look at all possible alternatives to redundancies first, but if employers conclude they have no choice, then they have legal requirements they must follow," he said.

He stressed that employers must engage with their workforce at an early stage to gather their input on proposed cuts.

"This means they must consult with staff early to seek their views, or risk being subject to a costly legal process," Mr Rowan added.

The scale of Britain's redundancy crisis has escalated dramatically, with job losses climbing 45 per cent since 2021 according to figures obtained through a Freedom of Information request to the Insolvency Service.

Richard Hunt, director at Liquidation Centre, warned around 327,000 workers could lose their jobs in 2026 alone, with the scale of the cuts potentially rivalling levels seen during the 2009 recession.

The opening months of 2026 have already proved alarming, with 736 employers submitting redundancy notices that affected more than 56,000 positions during January and February.

This represents an 8.5 per cent increase on the corresponding period in 2025.

The Chancellor's tax policies stand accused of driving the crisis, with her £25billion employer National Insurance increase and elevated business rates triggering a surge in closures and insolvencies across the hospitality and retail sectors.

Pubs are shutting their doors daily while high street chains fall into administration, prompting experts to warn of a "taxageddon" engulfing British businesses.

These mounting tax burdens have pushed some firms into insolvency.

Last year's redundancy payouts totalled £478million, underscoring the extent of workforce cuts already underway.

The Chancellor is being urged to provide greater support for struggling businesses.

The broader economic picture remains bleak, with EY Item Club forecasting unemployment to reach 5.8 per cent by mid-2027, up from approximately 5.2 per cent in early 2026.

This would push the total number of jobseekers beyond 2.1 million.

The British Chambers of Commerce predicts a peak unemployment rate of 5.5 per cent in 2027, driven by sharply declining job vacancies.

Chief Financial Officers at major UK companies have reported their lowest confidence since the pandemic began.

Major corporations are responding to the stagnant economy by prioritising cost control, preserving cash reserves, and freezing or cutting headcount.