One Third UK Firms Plan Further Job Cuts After NIC Increase

Recent research by professional services group S&W reveals that a significant portion of UK business owners are planning to reduce staff numbers due to increased employer National Insurance Contributions (NICs), which rose from 13.8% to 15% in April 2025 alongside a lowered threshold for payments. Nationally, about one in five businesses have already cut jobs, with an additional one-third planning further cuts, while many firms also intend to reduce working hours, freeze pay, and raise prices to manage rising costs. Regional data shows similar trends, with over half of businesses in the West Midlands and South East either having cut or planning to cut staff in response to the NIC changes, compounded by factors such as rising energy and raw material prices, global political uncertainty including the start of President Donald Trump's second term, and reduced customer demand. Business owners highlight that salary costs represent a major part of their expenses, making headcount adjustments a common response to increased taxation and economic pressures. Many firms are facing a combination of challenges, including higher commodity costs, labour shortages, and cyber threats, leading to cautious strategies to protect financial stability and jobs. Experts emphasize that businesses need to proactively address these risks to navigate the uncertain economic environment and maintain resilience.