Rising mind drain from the Metropolis of London is crippling small companies


At lunchtime, James Leahy’s Burrito Joe stand in the financial district of the City of London is usually buzzing when people around the corner line up for their fajitas, tacos, quesadillas and rice and meat bowls.

Now the same financial sector workers are working from home as UK government advice on how to contain coronavirus has rapidly escalated. And the Exodus has left small businesses like Leahy’s looking after bankers, insurance brokers, and technicians in the area struggling to stay afloat.

“We are down from around 60% of normal yesterday to around 20% today,” said Leahy, who has already shed two part-time workers, on Tuesday. “It’s already unprofitable. We have stocks that we want to move, but if they keep going down we have to close everything and hope for the best. “

More than half a million workers, or 10% of the London workforce, are usually pushed into what is known as the Square Mile, increasing the risk of people contracting the virus there. After professionals said the virus could kill 250,000 people in the UK if public activities weren’t restricted, the government pushed for social distancing and asked those who can work from home to do so.

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

Other areas still have to be considered by the Council. At Cannon Street Station, passengers mingled freely as they exited the building.

At 104, the UK’s virus-related deaths are still relatively small compared to continental Europe – almost 3,000 people have died in Italy alone. Still, the number of infections in the UK rose 35% to 2,626 on Wednesday, and the government’s new recommendations made London finance workers wonder if they should keep coming to the office.

Jeremy Stretch, head of G-10 currency strategy at the Canadian Imperial Bank of Commerce, says he will continue to work in the office for the time being, despite arriving early and leaving either early or late to avoid peak hours. Mike Riddell, a money manager at Allianz Global Investors, is considering working from home with some of his colleagues next week to follow the updated guidelines.

Companies have switched to videoconferencing to interview applicants, said Stefan Page, director of fixed income at Execuzen Ltd. “Funds and banks were a week ahead of the government,” he said. Some less leverage or macroeconomic strategies are currently seeing the opportunity to hire talent that is normally not available, he added.

Other headhunters say the job search that started before the virus appeared will continue but new roles will be canceled. That worries them about their own future as the recruiting industry could see mass layoffs, one of them said.

The government on Tuesday launched a bailout package of loans and grants for businesses to help mitigate the virus’ economic impact. The owner of the burrito stand, Leahy, hopes some of it will come to him.

He wants the government to help businesses like him through the crisis with measures such as a temporary abolition of the sales tax known as VAT. His landlord has agreed to charge less rent, and he hopes delivery apps will help increase sales from current levels.

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

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


Copyright 2021 Bloomberg.

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