The FTSE 100 crashed 252.43 points, or 4%, to 6,076 on a dark day for UK jobs.
Other major markets also suffered hefty declines as global Covid-19 infections continued to rise, including in some countries which seemed to have contained the virus.
The French Cac 40 and German Dax indices shed 4.18% and 4.47% respectively, while in the US the Dow Jones was 5% lower by the London market close.
Brent crude suffered a price plunge after US oil stocks hit an all-time high, with a barrel of the global benchmark down more than 6% at $38.67 by 6.15pm.
Shares in Centrica fell more than 4% to 40.12p after the Scottish Gas owner announced 5,000 job cuts. More than half of the job losses will hit leadership roles as Centrica strips out three layers of middle managers in an attempt to cut costs.
Manufacturing giant Johnson Matthey – down nearly 7% at £20.43 – is axeing 2,500 jobs after taking a hit from Covid-19.
British Airways parent International Consolidated Airlines Group was nearly 9% lower at 262.9p after the Unite union criticised its £890 billion deal to buy Spanish carrier Air Europa “while pleading poverty”.
