Analyst predicts loss of 2,500 electronics jobs in 2002Chris DrucePlimsoll Publishing predicts that nearly 2,500 UK jobs are to go in the electronics industry next year due to fundamental problems stretching back long before the current economic uncertainty.
According to Plimsoll’s 2002 portfolio analysis on electronics designers, the uncertain climate is not solely to blame for these job cuts.
The report found that for the last three years the cost of employing people has been increasing at a greater rate than the industry has been able to afford. The cost of salaries has increased by 22 per cent, yet sales have only risen by 7 per cent during the same period.
Some 71 per cent of companies are spending more on salaries than they were three years ago yet less than half are making more profit. Figures suggest that next year salaries will increase from an average of £26,619 to £27,980, a rise of 5.1 per cent.
Around 46 per cent of respondents have revealed that they will not be able to absorb these increases, and cannot afford to pay.
The report finds that 68 per cent of the industry will need to shed jobs in the next 12 months, and 59 companies are in serious financial distress and must take swift action to survive.
David Pattison, senior analyst of Plimsoll, said: “There is little doubt that managers will use the current economic and market conditions to make decisions frankly they should have made 18 months ago.”