The chaos in the market led to companies to reassure their workforce and shareholders that their financial position was secureThousands of UK jobs are at risk in the UK after some of the world’s largest firms warned that they could relocate their British-based operations due to the Brexit result of the EU referendum.
Investment bank JP Morgan, airplane maker Airbus and car manufacturers Ford and Toyota all said they will review their investments in the UK after the country voted to leave the European Union.
Profits could also be affected with British Airways stating that its annual profits will now grow at a slower pace due to the volatility in the market. The fallout from the vote also forced companies into issuing profit warnings. Sports Direct also expressed their fears warning that the value of the British pound against the US dollar would lead to increase in import costs.
Stock markets around the world fell sharply after the Brexit result was confirmed. The FTSE 100 was down 8% at one stage before ending the day down by 3%, with banks and housebuilders suffering the biggest falls.
Chief executive of US bank JP Morgan, Jamie Dimon, warned that approximately 1,000 to 4,000 UK jobs at the bank could move overseas, however, they also said in an email to company staff that they will maintain a large presence in London, Scotland and Bournemouth.
Dimon said in the email: “While these changes are not certain, we have to be prepared to comply with new laws as we serve our clients around the world. We will always do our best to take care of our people and do the right thing during times of change.
“We are hopeful that policymakers will recognise the immense value created through a continued open economic engagement between the UK and EU members. As negotiations offer more clarity over the coming months, we will communicate with you and with our clients regarding any relevant changes.”
The City of London employs over 360,000 people in financial services and analysts warned there were likely to be serious implications from the Brexit vote.
Nick Elwell-Sutton, partner at law firm Clyde & Co, said: “At a more fundamental level, unless the financial services passporting rules are resolved in the UK’s favour, then many large financial services businesses are likely to relocate to within the EU, meaning large scale redundancies would be highly probable.”
The manufacturing sector also expressed their concern with some of the UK’s biggest firms warning there could be job losses on the horizon.
Ford, which employs 14,000 in Britain, said it “will take whatever action is needed” to remain competitive.
The carmaker said: “While Ford will take whatever action is needed to ensure that our European business remains competitive and keeps to the path toward sustainable profitability, we have made no changes to our current investment plans and will not do so unless there is clear evidence that action is needed.”
Airbus, the maker of the A380 superjumbo, also expressed disappointment at the result. The company makes wings for its aircraft in Wales and employs 15,000 people in the UK.
“This is a lose-lose result for both, Britain and Europe,” Tom Enders, its chief executive, said. “However, the world will not stand still, nor will Europe. I hope the divorce will proceed with a view on minimising economic damage to all impacted by the Brexit.
“Britain will suffer, but I’m sure it will focus even more now on the competitiveness of its economy vis-a-vis the EU and the world at large. But of course we will review our UK investment strategy, like everybody else will.”
Japan’s Toyota, which manufactures cars in Derby, said it would “closely monitor and analyse the impact on our business operations in the UK”.
Tata Steel is trying to negotiate a deal to keep its UK business, which employs 11,000 people, but the outcome of the referendum was pivotal to its final decision.
Gareth Stace, director of industry trade body UK Steel, said: “The decision to leave the European Union will send shockwaves across the UK’s steel industry. Our sector is well versed in having challenges thrust upon it, but it’s clear that this is like no other.”
Both Rolls-Royce and Jaguar Land Rover, pledged to stand by their workforces saying,
“For Jaguar Land Rover, today is just business as usual,” said a JLR spokesperson. “We are a British business with a strong manufacturing base in this country, we call Britain home and we remain committed to all our manufacturing sites and investment decisions.
“We respect the decision of the British people and in common with all other businesses, Jaguar Land Rover will analyse the issues arising from it. As of today, nothing has changed for us or the rest of the British automotive industry.”
Stock market statements were issued by UK companies such as EasyJet and Aviva, insisting that there wouldn’t be a material impact to their finances as a result of the vote.
But International Airlines Group, owner of British Airways, had a different outlook.
“International Airlines Group believes that the vote to leave the European Union will not have a long-term material impact on its business,” it said. “In the short term, however, in the run-up to the UK referendum during June, IAG experienced a weaker than expected trading environment.”
Chairman and chief executive of Goldman Sachs, Lloyd Blankfein, told staff the US bank had prepared for a leave vote.
“We respect the decision of the British electorate and have been focused on planning for either referendum outcome for many months,” he said. “Goldman Sachs has a long history of adapting to change, and we will work with relevant authorities as the terms of the exit become clear. Our primary focus, as always, remains serving our clients’ needs.”
Jes Staley, chief executive of Barclays, also emailed workers. He said: “This is a significant decision and there will be many questions asked in the coming days and weeks about what happens next. The answers are complex but our position is not: we will not break our stride in delivering the Barclays of the future.”
Business leaders were passionate about Britain remaining in the EU, with more than 1,000 chief executives signing a letter backing a remain vote just days before the referendum.
The British Chambers of Commerce said the government’s response to the vote would be vital for businesses.
Adam Marshall, its acting director-general, said: “The health of the economy must be the number one priority – not the Westminster political post-mortem.
“Business will also want to see a detailed plan to support the economy during the coming transition period – as confidence, investment, hiring and growth would all be deeply affected by a prolonged period of uncertainty. If ever there were a time to ditch the straitjacket of fiscal rules for investment in a better business infrastructure, this is it.”
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