Susannah Streeter, chief investment strategist at Wealth Club, said: “AO World is the latest in a long line of companies blaming increases in labour costs for its decision to restrict hiring in the UK.
“It’s going to recruit more workers overseas and lean more heavily on automation to find savings to compensate for its higher wage bill.
“While no redundancies are being made, opportunities for younger, less experienced people to work in the business will shrink at a time when youth inactivity rates are worryingly high.
“For a technology-driven retailer like AO, many back-office, customer service and support functions can potentially be delivered more cheaply offshore, but these are the types of roles which are often entry-level, giving workers their first step on the workplace ladder.
“The online electricals retailer operates in a fiercely competitive environment, with margins under pressure.
“It previously estimated that higher National Insurance contributions and increases to the National Living Wage would add around £8million to annual costs, which is why management is clearly on the hunt for productivity gains and alternative staffing models.
“It follows retailers such as Next and Currys, as well as organisations including the National Trust, which have all flagged concerns about the impact of higher National Insurance contributions and wage costs on recruitment plans and job creation.”
Contact details are available to account holders.
Create a free account to get in touch with this expert.