Why are people on furlough losing their jobs?

[unknownn]

This may sound super stupid but I've got a burning question I cannot find the answer too on google
Many of my friends have been furloughed since all this began, they're cherished members of the company, no reason to want to be let go of. But a few of them have lost their jobs. I cannot think as to why people that are on furlough are losing their jobs? Surely it can't be that the company can't afford them , as the government is paying for them? I thought maybe because when this is all over the company won't be able to afford them, but why not just keep them on furlough and make that decision in the future ? Sorry if I'm being stupid ..🥴

Because the company has such reduced work (possibly none) and looking at recovery trajectory, won’t be up to previous capacity so won’t need the current staffing levels until the business has been rebuilt.

Company could keep them on until end July at least (assuming the company still exist). I suppose they're just being inconsiderate.

Government has also just announced that businesses will have to start paying 25% of salaries. If your business has no profit right, many won’t be able to afford that.

Because the work load after lockdown simply won’t exist.

@m0therofdragons they could still allow their staff to obtain the govt paid wage until the of july. No excuse for that really.

Their might know already that there will still be no work for them after furlough. A lot of businesses are already folding. A local business near me has already gone under, 200 jobs gone.

Because there’s no job for them to go back to
Furlough has created a cliff edge for some where there is no job to return to
Why delay the inevitable?
Employer can keep them furloughed under notice and beyond it’s expiry for the retaining them on furlough and then release them
Why should employer wait until furlough is over to go through consultation and notice periods which could be months if they know there is no job for people long term?

The employers will think ' x y and z did a sterling job without other people being in.
X y and z can carry on doing this and I'll make the others redundant! Win win for them ! This is what I feel anyway.

I’m furloughed and fully expecting to be let go once the furlough scheme ends/changes in August. But yes, I’m grateful my employer has kept me on through this so I’m getting 80% for now.

From August, employer has to pay 25% so I expect my boss to let me go then. His turnover has reduced by 90% and he thinks it will be years before the business gets back on its feet again.

These are the companies that are likely to go bust first.
It's a drop in revenue, they can't afford all the staff in the future and the work isn't there.
Companies like this will obviously keep going until the bitter end, with a few staff left in the end, just before they close.
It's sad but there's going to be a lot of unemployed soon.

It is quite a stupid question to be fair.

Do you think that the only cost of employees is their salary?

I guess if they are going to make them redundant then they will need to go through the consultation phase. And then there will be notice to be paid?

So now is probably the time many need to start the process to ensure its over with by end July.

I don't think this country really realises whats ahead

We are being paid furlough in arrears, so we've paid the employee from the business before we get paid by the government, if the business has no money in the bank they can't pay them. Also redundancy notice needs to be given, better to use the furlough money for the notice period then make redundant when the furlough stops. Cash flow is a massive issue for lots of companies atm.

Limiting their liability. If the job needs to go then limit what it's going to cost to let staff go. Accrued holiday will have to be paid out, pay during notice periods if furlough ends, time in service might mean it costs a company more by delaying making someone redundant.

Plus if you look at say restaurants, with social distancing they can only feed half the customers. So they won’t turn a profit.

Same with hairdressers who will have to build in X time for cleaning so less customers less profit.

They won’t be able to continue on this basis.

It will be to do with statutory consultation stages etc.

Unemployment is going to sky rocket in the next 12 months and this often hit lower paid staff with flimsy contracts the hardest. Not to mention how it could affect the earnings of the self employed.

Thanks for your responses, I struggle to keep up with the announcements and wasn't fully aware of the new 25% thing in aug. Is ashame, I'd imagine a lot of people being laid off end of July :(

Because their industry has collapsed

Perhaps it’s to do with making people redundant while they still have the money to pay redundancy payments, rather than waiting until that has been eaten by other overheads.

Because they can see they won’t need as many people

They have to consult to make redundancies - up to a 45 day requirement, so if they want to let people go before the requirement to contribute to the furlough payments comes in, they need to start now

People are accruing holiday which will need to be paid if not used

Lots of reasons

Company could keep them on until end July at least (assuming the company still exist).

The issue with this is it's not cost free to the company, they also have continued employment rights and accrue leave.

It's an awful situation but furlough has delayed lay offs, not saved jobs in a lot of cases.

m0therofdragons they could still allow their staff to obtain the govt paid wage until the of july. No excuse for that really.

They also pay NI on the employees. It isnt cost free to the company. As per pp, cash flow is also an issue.

An element of recognising that business isn't going to get back to normal as quickly as first thought.

While on furlough peoples redundancy entitlement is still increasing. So the longer people are on it the more redundancy companies will need to pay out.

Companies need to look after themselves.

To keep staff on furlough means taking on an amount of debt, easier for some companies still operating on some level with some level of cash flow. In some sectors incoming cash is absolutely zero - there basically is no business. So it's all outgoings. If the company can see a light at the end of the tunnel it's worth getting into more debt for. If not... well.. this is just the beginning.

Because the first instincts of the bean counters is to cut costs and the easiest way is to reduce head count. The theory being they can recruit as and when the market picks up. In fact it’s my impression that it is always the intent of any accountant to fire as many people as they possibly can at any time.