Crumbs of comfort on jobs front

When the Island lost its battle to reverse the UK’s decision to end Low Value Consignment Relief – the concession allowing Channel Island firms to sell and export VAT-free goods – it was clear that the fulfilment sector would suffer. Initially, however, it seemed that one of the major players, Play.com, would weather the storm.

But the company, now owned by Japanese retail group Rakuten, has pulled the plug on its Jersey operation, a decision which will lead to the loss of 147 much-needed jobs.

In any circumstances almost 150 redundancies would be a serious cause for concern – for social as well as economic reasons – but in the present climate it is even more worrying. Former Play.com employees will join the ranks of those who are already seeking work. They will, moreover, be as aware as anyone that the present number of job-seekers is, at 1,820, at an all-time high.

Meanwhile, there will be knock-on effects. Most obviously, Jersey Post, which processes and dispatches fulfilment industry merchandise will lose business. So, too, will other organisations that provide goods or services to Play.com.

By any standards, this is not a good start to the year and perhaps the best that can be said is that months lie ahead during which background conditions may improve and the economy may yet be turned around. It is at least possible that, during those months, sectors that could replace the contribution of fulfilment – notably e-gaming and business based on intellectual property rights – will finally begin to live up to their promise.

Even now there is one crumb of comfort to be drawn from the broader economic picture, albeit a small one. Economic Development Minister Alan Maclean, who acknowledges that the Play.com announcement is bad news and ‘horrible’ for those losing their jobs, says that other fulfilment concerns have successfully altered their operational models, have adapted and continue to trade profitably from their Island base.