In 2016, when the UK voted to leave the European Union, all the leading corporates were double-clicking on their expansion plans and re-looking at their workforce in Britain.
In the latest development, British Prime Minister, Theresa May’s cabinet has backed the draft withdrawal agreement between the UK and the EU. She said, “I firmly believe with my head and my heart that this is a decision which is in the best interests of our entire United Kingdom.”
This decision will definitely impact the number of jobs in the UK. Companies are considering the Brexit decision and re-looking at their operations in the region. This is likely to affect jobs in the UK across sectors.
In January this year, The Guardian had published a Cambridge analysis which predicted that a no-deal Brexit could shed as many as 87,000 jobs in London alone, with the capital’s economic output 2% lower in 2030 than what would be expected under a soft Brexit.
In the wake of the latest Brexit draft, Esther McVey, Britain's Work, and Pension’s Minister quit Prime Minister Theresa May's Cabinet, on Thursday over a Brexit deal agreed between London and Brussels. In a letter to the Prime Minister, she said, "The deal you put before the Cabinet yesterday does not honor the result of the referendum".
Given the fact that many Asian companies have operations in the EU region, they are also considering to relook at their plans. If the policies will not allow them to have an access to the EU region or they will be restricted to Britain only, then it will definitely make the company rethink their workforce strategy. Companies such as Toyota, Hitachi, Samsung, Panasonic, Honda, TCS, Tech Mahindra, and Tata have a strong presence in the region. And it is now time they plan their future post Brexit.
A BBC report highlights, Japan Inc. employs around 140,000 people in the UK and has about $59bn (£40bn) invested there. Car manufacturer Toyota exports almost 90% of the cars it manufactures in the UK - and three-quarters of those go to the EU.
Asian companies which have set up operations in the UK to gain access to EU markets will also have to re-evaluate. In the past, Japanese electronics firm Hitachi, for one, had said it will rethink its UK operations in the event of a Brexit.
The Tata Group has a massive presence with 19 firms in the UK across various businesses. It can be recalled that post the Brexit voting in 2016, the spokesperson of Tata Group had said, “Each company continuously reviews its strategy and operations in the light of developments, and will continue to do so. Access to markets and to a skilled workforce will remain important considerations.”
Asian corporate honchos are keeping a close watch on the situation in the UK and how the situations are unfolding every now and then. The industry leaders are expecting the situation to turn out in their favor because if it doesn’t, then they will have to pay a hefty price.
In a previous conversation with a media house, Corporate Lawyer Sarosh Zaiwalla had mentioned that Brexit will create problems for about 800 Indian companies based in the UK and generating a turnover of about £ 26 billion. “If the UK decides to leave the single market, these Indian companies will have to set up additional operational structures in Europe, raising business costs substantially,” he had said.
On the 14th of November, the cabinet has approved the draft deal and going forward this draft deal will go to EU summit for approval. The final decision will be taken in December 2018 when the UK parliament will vote and the final decision will then be taken. It is hence crucial for Asian corporates to keep a close watch on the latest developments in this regard. Whether they will re-evaluate their workforce strategy or decide on realigning their operations, is something that has to been seen as time unfolds.
Also read- Brexit & its Impact on Jobs