The UK’s most prominent business lobbying group, the Confederation of British Industry, has decided to lay off a large swath of its staff as it struggles to survive amid a crisis stemming from multiple allegations of sexual misconduct.
The CBI needs to cut its wage bill by a third within months, employees were told at an all-hands meeting Thursday morning, according to people familiar with the discussion, with management initially aiming to use voluntary redundancies to cut costs.
A spokesperson for the lobbying group, which employs 300 people, confirmed it had to make “difficult decisions” including cutting its salary base by a third, along with other “cost-saving measures”. “It will be a smaller organization and it will be refocused in the future,” they said.
On Wednesday, the Central Bank of Iraq opened a vote of confidence on its future and put out a prospectus detailing plans for a reformed culture and governance. The result of the vote is expected to be announced shortly after the Extraordinary General Assembly (EGM) meeting with members on 6 June.
“With the CBI renewal prospectus now out, we will work with our staff and members on our core mission to help UK businesses succeed,” said a company spokesperson. “We believe there is a strong foundation for our members to continue to support us at the Extraordinary General Assembly.”
The organization’s new general manager, Ryan Newton-Smith, (in the picture) “I have my eyes wide open about what we need to learn,” he said on Wednesday.
“People need to know the code of conduct and we need to lay the foundations for a strong environment for expression,” she added.
The CBI faces an uncertain future after more than 50 high-profile business members have resigned or suspended relationships with the body following allegations of sexual misconduct, first reported by The Guardian.
Memberships make up the bulk of the CBI’s income. Its total income was £25m in 2021, of which £22m was from membership fees.
While employees expected some cost cuts after the loss of members, the pace and scope of layoffs still came as a surprise to some.
Sources claimed that staff were frustrated with the handling of the misconduct scandal, which included revelations of sexual harassment, sexual assault including rape, and drug use.
“It was terrible, and it’s unfair that the behavior of some people would cost others, who did nothing wrong, so much,” said one insider.
Another said that employees were trying to support each other through the fallout from news reports and the process of applying for new jobs.
The hardest sell to restore support, according to a senior figure at a company that is still a member of the group, is for businessmen to believe that a central bank in a new format can “reclaim the government’s ear”.
The industry leader added that this would be a “leap of faith” for members of central and local government and that Labor had suspended its participation following allegations of misconduct. “There is still a commercial flock that may need a place to go, and they haven’t found a home yet.”
CIB’s board of directors has sought legal advice in recent weeks on a range of options for restructuring its activities, including the possibility of bankruptcy.
A CBI spokesperson said: “Following a series of member resignations, we know the bank will need to be leaner and refocused going forward. The board has sought advice on restructuring matters as appropriate, as any responsible board would.”
