Construction equipment manufacturer JCB plans to cut up to 950 staff jobs at its UK plants, as well as 500 agency roles – more than a fifth of its total UK workforce – after demand for its machines halved as a result of the coronavirus crisis.
The company has written to UK employees today to warn that roles are under threat at its 10 plants in Staffordshire, Derbyshire and Wrexham and that a 45-day consultation period will begin on Monday. Around 500 Guidant agency employees, who work at JCB’s UK sites, also face being laid off.
JCB CEO Graeme Macdonald said the decision to restructure JCB’s business had been extremely tough but that the company “had no choice but to take difficult decisions to adapt to this new economic reality”.
He said: “In 2020 we had planned to sell and produce over 100,000 machines. With so much global uncertainty, that figure right now is looking more like 50,000 machines. In the UK, around 85% of everything we manufacture is exported and our UK factories will now produce machines at half the rate we had planned just a few months ago. As a result, we have no choice but to align our cost base to demand for the rest of the year.
“It is deeply regrettable that we have had to take these steps to restructure the business and that it will have an impact on so many people. No business could have anticipated the scale of the covid-19 crisis and its economic consequences. JCB has had to act quickly for the long-term survival of the business, which has been at the heart of our decision-making throughout this difficult period.”
Majority of staff furloughed
JCB currently employs around 6,700 people in the UK, including agency employees. A 45-day consultation over the proposed JCB job losses will begin on Monday 18 May, when discussions with staff representatives will start.
The vast majority of JCB’s employees are currently furloughed until the end of May after production at UK factories stopped in March in the wake of the covid-19 crisis.
Macdonald added: “The government’s taxpayer-funded Job Retention Scheme, which was a temporary measure that has seen most UK employees furloughed since the beginning of April, was never going to be capable of sustaining employment at companies having to face such reduced levels of demand.”
The GMB Union said it was in “urgent talks” to try to save jobs. Stuart Harrison, GMB organiser said: “This announcement is devastating to everyone involved.
“As the recognised union, GMB’s senior representatives have entered into urgent talks about the future of the business with management.
“We will keep fighting to avoid job losses at all costs, for our members and their families.”