109k jobs cut as first signs of NI increase strikes

The fallout from the 1.2% rise in employers’ national insurance has hit employment figures with 109,000 job losses in May, the worst figure for four years

Payrolled employment was down by 109,000 employees (0.4%) in May 2025 based on early estimates when compared with April 2025, with the overall unemployment rate rising to 4.6%. This is the highest figure since April 2021, just after the full impact of the pandemic.

Inevitably, the worst hit sector was hospitality with the job cuts of 5.6% across hotels, bars and restaurants, closely followed by IT and telecoms at -3.4%. Retail was down -2.4%. Overall employment was down 0.9%.

Kate Nicholls, chief executive of UKHospitality, said: ‘Losing more than 100,000 jobs across the economy in a month goes far beyond the worst-case scenario predicted by the government’s own fiscal watchdog, major banks, and countless business groups.

‘These shocking figures should make it abundantly clear to the government that the changes to employer NICs are inflicting more harm than good, and they should be reviewed and reversed urgently.’

It is still too early to see the full extent of the NI hit to business.

With less than a month’s full data from HMRC since employer NICs went up from 6 April, the Office for National Statistics (ONS) warned: ‘Early estimates are subject to significant revisions as more returns are received by HMRC next month. The earlier timing of the data extract for May 2025 means these estimates are more uncertain than usual.’

The latest figures also show a long-term decline in payrolled employees as more workers move into self employment and gig economy jobs, especially in retail and hospitality. But overall PAYE salaries remained much higher than pre-pandemic with rising tax burden and high wage growth.

Source - Business & Accountancy Daily

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