More than one in five small and medium-sized businesses expect to make redundancies by the start of 2027, according to new research from Acas, highlighting ongoing pressure on employers amid rising costs and regulatory change.
The workplace conciliation service found that 21 per cent of SMEs are likely to make staff redundancies between now and January 2027, while the figure rises to 46 per cent among large businesses.
Overall, a third (33 per cent) of British employers said they are likely to cut jobs during the period, according to a survey of 1,011 senior decision-makers conducted by YouGov on behalf of Acas.
The findings come as businesses prepare for changes to collective redundancy rules under the Employment Rights Act 2025, which will extend consultation requirements to redundancies proposed across an employer's entire organisation rather than at individual workplaces.
Kevin Rowan, Acas director of dispute resolution, said employers should consider alternatives before resorting to job cuts.
"The results of our poll reveal that a third of businesses are considering redundancies by the start of next year," Rowan said.
"Organisations should look at all possible alternatives to redundancies first, but if employers conclude they have no choice, then they have legal requirements they must follow. This means they must consult with staff early to seek their views, or risk being subject to a costly legal process."
He added that the upcoming legislative changes would place greater emphasis on meaningful consultation between employers, employees and trade unions.
"In 2027, the government's Employment Rights Act will introduce new consultation requirements if redundancies are proposed across multiple sites. Acas recommends that the government ensures employers and trade unions understand the value of collective consultation and have the skills to work well together."
Under current rules, employers planning to make 20 or more employees redundant within a 90-day period at a single workplace must consult recognised trade unions or elected employee representatives.
From 2027, the threshold will apply across an employer's entire organisation, meaning businesses operating multiple sites, including retail chains and convenience store groups, could face wider consultation obligations when implementing workforce reductions.
Acas warned that employers failing to meet consultation requirements could face employment tribunal claims. If a tribunal rules in favour of employees, organisations may be required to pay up to 180 days' full pay for each affected worker. Employees may also pursue unfair dismissal claims where consultation has not been meaningful.
The government recently concluded a consultation on how the new rules should operate, including the threshold that would trigger collective consultation requirements across multiple sites.
In its submission, Acas urged ministers to ensure any new threshold is straightforward to understand and administer, helping businesses avoid procedural disputes and unnecessary administrative burdens.
The organisation also called for greater support to help employers, trade unions and employee representatives understand the benefits of collective consultation and develop the skills needed to work together effectively.
The survey found that while a third of employers expect redundancies, the majority (59 per cent) said they were unlikely to make job cuts before January 2027.