Fears that unemployment will soar in 2009 intensified yesterday as Marks & Spencer laid plans to shed 1,000 staff and other big companies prepared to send out P45s with January results.

The bad news came as a report from Britain's recruitment consultants found that the number of staff placed into full-time jobs was plunging at its fastest pace in more than a decade.

A swath of companies most affected by the consumer downturn, including retailers, food manufacturers, housebuilders and pub groups, will report trading figures in the next two weeks. Two - InterContinental Hotels Group and Bellway Homes - will announce job cuts.

InterContinental, the world's biggest hotel company by number of rooms, with brands including Holiday Inn, Crowne Plaza and Indigo, is believed to be cutting hundreds of jobs worldwide in response to a drop in trading in many of its main markets.

Up to 200 of the job losses are believed to be in the UK, where it has about 240 managed and franchised properties. About 30 job cuts are thought to be at IHG's head office in Denham, Buckinghamshire, with the rest in the 70 hotels that it manages.

Bellway Homes, the housebuilder, which said in November that it would consider job cuts in the run-up to its annual meeting next week, is also understood to be preparing to cut staff in response to the tough housing market.

The latest Report on Jobs from the Recruitment and Employment Confederation and KPMG, the accountant, released today, shows that 62 per cent of recruitment agencies said that permanent placements fell in December, the ninth month of decline.

Recruitment groups blamed the worsening trend on rapidly deteriorating economic prospects and evaporating confidence among employers. They found that demand for temporary staff was also sinking fast, along with vacancies, while the number of candidates seeking work was soaring.

Further confirmation of the state of the jobs market came in the latest CIPS/Markit barometer of the vast services sector, which accounts for about two thirds of the economy. Jobs in service industries, which span pubs, hotels and restaurants to accounting groups and law firms, are being cut at the fastest rate in 12 years, the survey suggested.

The accelerating pace of layoffs from services businesses of all types come as the sector's activity levels plummet in the face of the recession.The survey suggested that the pace of decline in services eased a fraction last month, with the headline reading in the CIPS survey at 40.2 for December, against 40.1 in November, where any figure under 50 indicates contraction. Economists said that these figures were still consistent with output in services tumbling by a steep 1 per cent in the previous quarter, however.

The Times disclosed yesterday that M&S would cut more than 1,000 jobs today after a difficult Christmas trading period. However, M&S has been accused of plotting a jobs cull months in advance by the GMB union. GMB pointed to moves made by the retail group last year to cut redundancy terms for its workers, reducing the pay given to long-serving members, as evidence that the redundancies expected to be announced are part of a long-standing, secret cost-cutting plan. M&S dismissed a whistleblower who leaked the change in redundancy policy to The Times.

The union told M&S, which has 75,000 staff, that it would challenge any attempt to bypass regulations forcing an employer to give a 90-day consultation period when making redundancies. A GMB spokesman said: “We believe M&S has been planning this for four months.”

Maria Ludkin, GMB's legal officer, said: “If M&S tries to take a short cut and treat each shop as a separate workplace, and thereby give only 30 days' notice, GMB will not hesitate to take employment tribunal cases for a 90-day protective award.”

M&S declined to comment.

The Council of Economics and Business Research is forecasting that between 100,000 and 135,000 shopworkers will lose their jobs this year. Retailers such as JJB Sports are expected to announce job cuts in the coming months. David Jones, its new executive chairman, conceded last weekend that it may be necessary to close its struggling lifestyle division, which includes Qube and Original Shoe Company.

Mark Hudson, head of retail at PricewaterhouseCoopers (PwC), said: “Sales are falling and retailers have got to find a way to balance the books. Their main outgoings are rent, stock and employees. You can't do much about the first two, so the cost of the people you employ is the area to get squeezed.” PwC estimates that amid growing internet sales, there is 50 million sq ft of spare shop space.

Dole queues grow

100,000 minimum number of retail jobs expected to be lost in 2009

27,000 number of Woolworths staff made redundant

2.5 million estimated unemployment by end of year

Source: CEBR, Times Database, E&Y Item Club

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