Restructures and redundancies on the rise for businesses

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The EMA says rising inquiries to its AdviceLine and the announcement by Fletchers of about 1000 redundancies underlines the tough times businesses big and small continue to face under Covid-19 restrictions.

Chief executive Brett O’Riley says businesses are increasingly having to make the tough decisions to ensure their survival as they can no longer hold off.

“Calls to our AdviceLine on restructuring and redundancy since March are now double the usual rate of inquiries,” O’Riley says.

“Since the lockdown began on March 25 until yesterday, we’ve fielded 650 calls about restructure and redundancy. That represents nearly 10% of our membership base,” he says.

“We’ve already had almost 200 inquiries this month with nearly two full working weeks left in May. With the deadline for the first tranche of the wage subsidy approaching in June, I expect the figure for May to exceed the 250 inquiries we had in March.”

Mr O’Riley says while redundancies at the big end of town were the most visible, the majority of EMA members were from the SME sector, and that is where the most damage would occur when the current wage subsidy ran out and the tighter restrictions for phase two of the subsidy kicked in.

“While many businesses are able to operate at something near normal at Alert Level 2, there are also many businesses that can’t open, or remain uneconomic, under Level 2 restrictions. That strengthens the case for moving to Level 1 as soon as possible if the health conditions allow,” he says.

The EMA is also working with central and local government on a number of recovery opportunities, including the manufacturing and export sectors, skills, and transitioning workers.

In the meantime, the EMA’s AdviceLine and BusinessLine services were continuing to offer assistance for businesses and members seeking a way through the issues posed by Covid-19.

Webinars on Retention and Redeployment, and Restructure and Redundancy with the EMA’s Head of Legal, Matthew Dearing, are also available to all businesses.

The EMA’s AdviceLine is 0800 300 362.