Growing Exodus of Workers from City of London Cripples Small Businesses

By , Greg Ritchie and Anooja Debnath | March 19, 2020

At lunch hour, James Leahy’s Burrito Joe stall in the City of London’s financial district is usually buzzing as people line up from around the corner for their fajitas, tacos, quesadillas and rice-and-meat bowls.

Now, those same finance sector employees are working from home on the back of a rapid escalation in the UK government’s coronavirus containment advice. And the exodus has left small businesses like Leahy’s that cater to the bankers, insurance brokers and tech workers in the area struggling to stay afloat.

“We’ve gone from about 60% of normal levels yesterday down to about 20% today,” Leahy, who’s already had to cut two part-time workers, said on Tuesday. “It’s already unprofitable. We have stock we’re trying to shift, but if it continues to go down we’ll have to close it all down and hope for the best.”

More than half a million workers, or 10% of London’s workforce, are usually squeezed into the so-called Square Mile, increasing the risk of people there catching the virus. After specialists said the virus could kill 250,000 people in the UK unless public activities are curtailed, the government has pushed for social-distancing, asking those who can work from home to do so.

Buses and pubs are noticeably emptier, and people have been consciously trying to avoid each other on London Bridge, one of the busiest crossings to the city’s main financial district.

Other areas have yet to take on board the advice. At Cannon Street rail station, passengers freely mingled as they exited the building.

At 104, the virus-linked fatalities in the UK are still relatively low compared with continental Europe — where in Italy alone it has claimed close to 3,000 lives. Still, the number of UK infections jumped 35% to 2,626 on Wednesday, and the government’s new advice has left London’s finance workers wondering whether they should continue coming into the office.

Jeremy Stretch, the head of G-10 currency strategy at Canadian Imperial Bank of Commerce, says he’ll keep working in the office for now, though he’s arriving early and leaving either early or late to avoid peak commuter times. Mike Riddell, a money manager at Allianz Global Investors, is mulling joining some of his colleagues in working from home next week following the updated guidance.

Firms have shifted to video conferencing for interviewing job applicants, said Stefan Page, director of fixed income at executive search firm Execuzen Ltd. “Funds and banks were a week ahead of the government,” he said. Some firms that use less leverage or have macro-driven strategies are seeing an opportunity at the moment to hire talent that might not normally be available, he added.

Other headhunters say that job searches that started before the virus hit are continuing but that new roles are being canceled. That leaves them worried about their own futures as the recruitment industry could see mass lay-offs, one of them said.

The government on Tuesday introduced a rescue package of loans and grants for businesses to mitigate the impact of the virus on the economy. Burrito stall owner Leahy is hoping some of that will come his way.

He wants the government to help businesses like his ride out the crisis with moves like a temporary lifting of the sales levy known as Value Added Tax. His landlord has agreed to charge less rent and he is hoping that delivery apps will help increase sales from present levels.

“Most of my workers have been with me for over six years,” he said. “It’s going to be hard for me as an employer to say ‘Look, I’m really sorry, but I’m going to have to let you go.”‘

–With assistance from Mark Burton, Ambereen Choudhury and Nishant Kumar.


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