The Cabinet was secretly warned earlier this month that tens of thousands of jobs could be lost and thousands of businesses could go to the wall when the Employment Wage Subsidy Scheme (EWSS) ends next April. The Sunday Independent can reveal details of a confidential memo prepared for ministers which outlined how nearly 300,000 jobs in almost 25,000 businesses are dependent on state subsidies, many of them in the hospitality sector. “The ongoing importance of EWSS to subsidise employment raises questions about the ultimate viability of those jobs and indicates that a further shakeout will happen once EWSS is withdrawn,” the memo states. A shakeout refers to a situation in which people lose their jobs or companies stop doing business because of economic difficulties. The memo notes that a “very large share” of former pandemic unemployment payment (PUP) recipients have now moved into employment that is backed by the EWSS subsidy. “This underlines the ongoing dependency on state supports for a significant share of employment, with specific sectors such as hospitality particularly reliant,” it states. The most recent Revenue figures show that 24,300 employers were reliant on the EWSS in November at a provisional cost of €332.6m to the Exchequer, which supported the wages of 280,300 employees. Nearly a quarter of the employers using EWSS are in the accommodation and food services sector, with more than 40pc of employees benefiting from state-subsidised wages working in that same sector. Finance Minister Paschal Donohoe last week extended the EWSS at current rates of between €203 and €350 per week, depending on earnings, until the end of January in light of new restrictions on the hospitality and live events sectors. However, the payments will be tapered from February onwards and the scheme will be shut down on April 30 under current plans. While Mr Donohoe warned this would be “a moment of risk”, the confidential memo paints a starker and worrying picture. “There is a moment of reckoning ahead of us,” one cabinet minister warned this weekend. The Government’s direct support for businesses and employers has been among the most generous in the European Union and are in part responsible for the State’s strong economic performance. The chief economist at the State’s budgetary watchdog, the Irish Fiscal Advisory Council, Eddie Casey, acknowledged there is a concern in some quarters that the Government is “supporting so-called ‘zombie firms’; that maybe there are some companies there that are benefiting from it that won’t be viable in the long run”. Mr Donohoe’s former chief adviser, Ed Brophy, said there was an expectation in the Department of Finance that the EWSS…