With economic pressure continuing to affect businesses across Wales, concerns are growing around whether companies are prepared for a potential rise in redundancies.
While large-scale job cuts have not yet returned to previous levels, many organisations are already reviewing costs, restructuring teams, and planning for uncertainty. For employers, the question is no longer whether the conditions for redundancy might arise, but how prepared they are if they do.
The signs of strain are becoming harder to ignore. Persistent inflation, higher operating costs and cautious consumer demand have left many Welsh employers revisiting budgets that looked manageable a year ago. Wage costs and energy bills continue to weigh on margins, and several sectors have reported slower trading conditions into 2026.
Hiring patterns reflect that caution. Recruitment activity has cooled in parts of the country, with employers holding open vacancies for longer or pausing them altogether. Internal restructuring has quietly become more common, with companies consolidating roles and reassessing whether existing structures match the work that actually needs to be done.
Cardiff solicitors at Berry Smith, an independent Welsh firm with offices in Cardiff and Bridgend that regularly advises employers on workforce matters, say more businesses are starting to review structures earlier, rather than waiting until financial pressure becomes critical. The shift suggests a growing recognition that earlier planning gives employers more options and fewer regrets.
Where redundancies do follow, the legal pitfalls tend to look similar from one case to the next, and many of them are avoidable. Unfair dismissal claims remain one of the most common consequences of a poorly handled process, particularly where selection criteria are unclear or inconsistently applied. Consultation requirements are another area where employers fall short. The duty to consult, individually and collectively, where 20 or more redundancies are proposed at one establishment within 90 days, is not a procedural box-tick. It carries protective time frames and meaningful consequences if compressed or skipped.
Process mistakes often compound the problem. Roles are sometimes scored before suitable alternatives have been considered, and appeal stages are left out. Documentation tends to be the thread tying these issues together. Without contemporaneous notes, scoring matrices and consultation records, employers can find it difficult to defend decisions if they are later challenged in a tribunal.
According to Berry Smith, many employers underestimate how structured the redundancy process needs to be, particularly when multiple roles are affected.
Most disputes do not arise from the decision to make redundancies. They arise from how that decision is reached and communicated. Employers who treat planning as a last-minute response to a financial deadline tend to find themselves making rushed choices under pressure, and rushed choices are where errors creep in.
Early planning allows time for proper consultation, for genuine consideration of alternatives such as redeployment or reduced hours, and for clear communication with affected employees. It also gives leadership teams the chance to align on the business rationale, so that the message reaching staff is consistent and defensible. Berry Smith highlights that taking early legal advice can significantly reduce the risk of disputes later in the process.
The consequences of getting redundancy wrong extend well beyond the immediate legal cost. Internally, morale among staff who remain can take a significant hit. If a process is perceived as unfair, those left behind often question their own security, productivity dips, and trust in management can take months to recover.
Externally, reputation matters more than ever. Former employees talk publicly. Online reviews, LinkedIn posts and word-of-mouth across tight-knit Welsh business communities can shape how a company is viewed by future candidates, customers and partners. Employers known for handling difficult decisions with fairness and transparency tend to recover more quickly. Those that do not can struggle to attract talent when conditions improve.
For businesses that may face difficult decisions in the months ahead, the most useful work can be done before any redundancy is announced. Reviewing employment contracts is a sensible starting point, particularly clauses relating to notice periods, restrictive covenants and pay in lieu, to confirm that current agreements reflect what the business actually relies on. Documenting processes is equally important. Clear, written procedures for consultation, selection, scoring and appeals give managers a framework to follow under pressure and provide an evidence trail if decisions are later questioned.
Contingency planning is the third piece. Modelling different scenarios, including voluntary redundancy, redeployment and restructuring without job losses, gives leadership teams more flexibility and reduces the likelihood of being forced into a single path. Cardiff solicitors such as Berry Smith emphasise the importance of having clear, compliant processes in place before redundancies become necessary.
While redundancies may not yet be widespread, the direction of travel suggests that preparation is becoming increasingly important. Businesses that take a proactive, structured approach are more likely to navigate the process effectively and avoid unnecessary legal risk. For Welsh employers, the message from those advising on these matters is consistent. The time to put the right processes in place is before they are needed, not after.
